Transcripts For CNBC Power Lunch 20160720

Coming your way. But lets kick things off with the aforementioned Michelle Carusocabrera live in cleveland. Michelle. Hey, tyler. Another newsy day. Weve had news break in just the last half hour that the trump employee who helped write Melania Trumps speech, well, that person has accepted responsibility for the similarities to Michelle Obamas 2008 speech John Harwoods going to join us with all the details. Big night, senator ted cruz, onetime president ial hopeful expected to speak. Whats he going to say after trump called him lying ted in the primary . And then of course the headliner is indiana governor mike pence who has the spot of v. P. On the ticket as senator marco rubio, its going to be a big, big night. Lets get details on speechgate. John harwood is on the floor. John. Michelle, its very interesting. This is an expla thags that the Trump Campaign could have offered yesterday but chose not to. Instead the Campaign Chairman Paul Manafort came out and said, no, there were no phrases borrowed, they were just common words. Now theyve put out a statement saying that was not true. That meredith who worked with Melania Trump on the speech said that Melania Trump had read michelles words outloud to her, she wrote them down without attributing the quotation then put them in the speech. She said she offered her resignation yesterday to the Trump Campaign. The Trump Campaign rejected it. Shes grateful for their loyalty to her. And so republicans are hoping that this will put a punctuation mark on this controversy. The question is whether it revives it actually because last night the convention had moved on, tiffany trump, donald trump jr. Gave effective speeches on the floor. And now weve got the further detail about exactly how the borrowed phrases did in fact get into Melania Trumps speech. John, there was you reported earlier that she had actually read out part of Michelle Obamas speech, is that correct . She was an admirer of Michelle Obama . She said that Melania Trump was an admirer of michelle. That Melania Trump in working on the speech with her had read aloud portions of Michelle Obamas 2008 speech. And she, meredith mckiver, the speech writer, wrote them down. And then when she was assembling the speech, typed those words in as if they were Melania Trumps as opposed to Michelle Obamas. So she gave a clear accounting of how those phrases got in there. And thats what was new today. John harwood, thanks so much. Joining us now, Donald Trumps chief fundraiser. Welcome to power lunch. Thank you. Its great to be here. We want to get to that topic in a second, but this Melania Trump story that wont die related to her speech, it gives the sense once again Carl Quintanilla used a kind word earlier, the improvised nature of the campaign, the inability to come up with this explanation yesterday, now reviving the whole drama today. It speaks to some would think a level of disorganization. Well, let me first say this is just an unfortunate distraction. Melania gave a great speech. The important part is the message she was saying, the people here loved it. They went crazy. They loved the fact donald was here to introduce her. Thats never occurred before. And it was one of the most exciting parts. And the fact there was part of this speech there was this unfortunate situation is really a distraction. And last night don jr. And tiffany were amazing. So, look, nobody expects the first lady to be Gabrielle Garcia marcus, i get that, right . But speak to this issue of the constant kind of amateur mistakes that seem to be happening on the campaign. I dont think these are amateur mistakes. What i think is, look, this is a billion dollar startup, okay. And if theres a few mistakes that the press is blowing out of proportion, thats not a big deal. Were proud of the fact that we have 150 people and Hillary Clinton has 850 people and spending money hand over fist. Hillary would have had 22 people check that speech before it even got to her. So this is just an unnecessary distraction on what is an unbelievably exciting week here. And especially with the addition of the governor, people just couldnt be more excited about this ticket here. Are you going to be the treasury secretary if donald trump becomes the president . Let me just say first of all, whatever job donald wants me to have when hes elected, id be honored to serve him. Would you like the job . Id be honored to serve him in any capacity he wants. Again, this was something that was mentioned yesterday. And the press has picked up. Obviously no decisions have been made on any transition positions. And im honored to even be considered for it. So not to bang on about the improvised nature, but we heard carl icahns name thrown around at one point as potential treasury secretary, another name i cant even remember at this point, youre the third name. It again speaks to this kind of rolling with it approach to the campaign. Where his positions just dont seem very fixed. Again, i think this is quite the opposite. This is the press exaggerating and playing off on things. Let me tell you were just starting the transition office. Governor christie is leading that effort. Hes doing a terrific job. After the convention that will gear up. There havent been any decisions made or any official vetting, so whether its my name or other names being thrown around for these jobs, the focus is on getting donald elected. And thats the focus of the entire campaign. You used to be with goldman sachs. Yes, i did. The platform, the official platform of the gop now wants to bring back glasssteagall. Is that something you would support if youre in the cabinet . I think thats something we have to very, very seriously think about. Thats not a no. I think its something we have to think about. Why . I would say that first of all theres way too much regulation across many different industries. Whether its banking, whether its energy. You know, we think that in many of these areas you need to look at regulation. We believe in correct regulation, but we dont believe in overregulation. So bringing back glasssteagall to me sounds like more regulation, not less regulation. Well, again, i just want to be clear, were not taking a position on whether we support that or we dont support it, were saying that a lot of things need to be looked at. I think dodd frank needs to be looked at. Obviously theres an important concern of protecting depositors. So all im saying is like Everything Else things will be looked at. And well see what makes sense. But id say the overriding theme is there is way too much regulation across too many industries. And if you look at energy, we believe that there can be clean air and clean water and Energy Independence with less regulation. Thats an important part of this campaign. Tell me about the donors that youre getting at this point. Because the whole world has taken note of the fact people like paul singer are not here and not supporting donald trump. Some of the biggest donors to the Republican Party have stepped away because donald trump is on the ticket. Are you able to replace those people . Well, let me first say were sorry that paul isnt here. Hes missing a terrific week. Theres a lot of other super donors, okay, that are here, okay. Like who . Sheldon edelson, there are a lot of republican donors that are here. And the more exciting thing is there are people that have never been part of the Republican Party, that have never donated, that are here and here to support this. This is one of the most exciting weeks. I said the other day its the super bowl of conventions. This is it. Mr. Mnuchin, thanks so much for joining us. Thank you very much. Well look forward to the next events over the next 48 hours as this comes to pass. Dont forget live from the Republican National convention 10 00 p. M. Eastern time right here on cnbc. So we can introduce mike pence tonight. Guys, back to you. Michelle, thank you very much. See you in a bit. The big news outside the convention is also probably a hot topic inside the convention. What is the future of fox news chief roger ailes. Julia boorstin has the latest. Hey, brian. Thats right. Sources tell us that roger ailes and 21st century fox are in negotiations over the terms of his exit in the wake of a Sexual Harassment suit followed by anchor Gretchen Carlson and more allegations surfacing. 76yearold ailes oversees about 20 of 21st century foxs revenue as well as earnings before interest, taxes, depreciation and amortization. Now, ailes is chairman and ceo of fox news including Fox Business Network which he launched in 2007. Hes also chairman of the 28 fox tv stations. Now, on this news fox shares are trading down over about 2 . But bernstein analyst issued a note today reiterating his outperform rating on the stock saying while losing ailes injects some degree of risk, they struggle to identify any trouble nearterm financial implications. This is the first james and Lachlan Murdoch evidence say its the shift theyre driving at the company and also replaced m and reorganized the International Business and pushed for more directtoconsumer tv distribution. Now, as for fox news next chapter, sources are saying fox is looking at both internal and external candidates, a longtime fox exec will shine as one of those names being considered as an ailes replacement. Back to you. Julia, thank you very much. Now to another developing story weve been following closely right here on power lunch for weeks now. Talking about Autonomous Vehicles. And now the national Highway Traffic Safety Administration is weighing in on the topic. Lets get straight to phil lebeau in chicago. Hi, phil. Hi, tyler. The comments this morning from nhtsa administrator in San Francisco stressed the fact that nhtsa is working to finalize these National Guidelines for Autonomous Vehicles. And as they do that they realize many people are saying, wait a second, you had this accident involving a tesla vehicle on autopilot that ended up with the driver of that vehicle being killed in an accident. Are the is the technology coming along too quickly . To address that topic, within the last hour dr. Rosekind from nhtsa talked about how the critics out there perhaps are jumping the gun a little bit in terms of their criticism on these rules. They are shocked, shocked to discover theres vehicle automation that is already here. And for some of those same critics who mere weeks ago were saying nhtsa was moving too fast, theyre now sending out press releases demanding to know where is the government to stop this. And dr. Rosekind says they are finalizing those Autonomous Vehicle guidelines. He will not comment and did not comment this morning about the tesla investigation, which is ongoing. Speaking of tesla, shares have been moving higher. Elon musk is promising to deliver his master plan for tesla rationalizing the solarcity bid. One of the things that occurs to me is not only do you have to create the technology that works, is reliable and is easy to use, but you really do have to educate the drivers and the users of these vehicles. When i get today my manual that teaches me how to use my navigation and Entertainment System in my car, its about 300 pages long with all kinds of capabilities that i never use. I can only imagine how long the manual will be and what ill be expected to know about an Autonomous Vehicle. Well, thats the challenge with all new technology. When i bought our newest vehicle just a couple of years ago, my wife looked at me and she said how long until we can get out of here. I dont want to sit here and read through a manual or listen to the person selling the vehicle to me. Thats not just you, tyler, thats everybody. And thats part of the challenge that the regulators are hoping to address, which is educating people on the proper use of the technology but not giving them a feeling that it can do everything so they can disregard paying attention behind the wheel. You know, there is a joke, guys, that if you want to ask what is the most unread book in the world, seriously, it is is it car manual . It is car manuals. Not paper printed on those things in every car in the world and im not sure who has ever opened one other than to see what kind of oil the car may take. And thats a stretch. Or where the hood release is. Thats my problem. I cant find it on my car. Thats the idea. Bill, thank you very much. You cant find the hood release . I cant find the hood release. Generally lower left under just a thought. I cant. So much for the end of the world. The dow is now up nine days in a row. New record highs all around. But are there any troublesome signs out there for you or your money . Were going to find out and help tyler find the hood release coming up. Tokyostyle ramen noodles. Freshly made in the japanese tradition, each batch is small. Special. Unique. Every bowl blurring the line between food. And art. When you cook with incredible ingredients. You make incredible meals. Fresh ingredients. Stepbysteprecipes. Delivered to your door, for less than 9 a meal. Get 30 off your first delivery blueapron. Com cook. Record setting day. Dow and s p 500 new intraday highs. Dow up now for a ninth day in a row. The longest winning streak since march of 2013. Is this a trump rally . Lets bring in brian pier, Portfolio Manager of the hennessy cornerstone mid cap 30 fund and patrick, chief strategist at silver crest asset management. Ill set aside for a moment whether this is in any sense a trump rally. Well get to that. But what i do want, ill begin with you, patrick. What i do want to know is did this rally, either its timing, its persistence, its magnitude surprise you . I think it surprised me to some degree because were seeing very high valuations in the equity market. But i think it really comes ironically as a result of brexit. Because brexit has pushed down Interest Rates in the united states. And when we see Interest Rates this low, usually theyd be flashing a sign of recession, impending recession in the united states. But in fact its not about internal weakness. Its about external weakness. And the fact that you have negative Interest Rates abroad, you have expectations of further easing are pushing capital to the united states. Theyre keeping Interest Rates low and theyre pushing up valuations. And that is supported by the fact that you do actually have growth and you do have good earnings. Nine in a row isnt exactly dimaggios 56game winning streak. But it feels pretty good. It feels pretty good. Is trump in any sense responsible for it . I dont believe so, no. I think actually weve seen a shift in the marketplace. And i think up until this point youve had a utilities and kind of Telecom Sector thats been leading the market. And i think youre now starting to see a pivotal shift back into Consumer Discretionary names and names that really hadnt participated up until this point. Utilitys the only sector, as a matter of fact, down over the past month. Right. But lets followup on tylers first point. How much of the rally is just because bonds are yielding nothing around the world . Because theres two reasons to own a stock, im optimistic that this companys going to produce earnings that will give me money, or Everything Else sucks. Stinks. And so im going to buy stocks, which is not a longer term strategy. Which one of those is it . You get my point, right . Everything else stinks so im going to buy stocks, thats not exactly a ringing endorsement for the stock market. No, i agree. But to Patricks Point the valuations have been pushed up to a certain degree. I think weve got this catalyst in the brexit where the market was pulled down enough points where people looked at that as a potential entry point and really looked at some of the companies and the underlying fundamentals and said longer term we think that the growth returns back and we particularly like domestic economy. And we think that, you know, all of this uncertainty in the eu bleeds money to come back here. And theyre looking for opportunities. And so maybe theyre starting to seek out these areas. Its a combination. Because the rest of the world is looking to the u. S. For growth and investment returns partly oud of their weakness. But theyre also finding it here. Where can i invest today for return and safety over the next 12 months . I think selectively in u. S. Equities, particularly in areas that have been neglected or lumped together with others. For instance, consumer facing industrials is one area. Like . Give me an example. Im not saying youre going to recommend that stock. I dont these would be Companies Like consumer facing industrials. Something like 3m where they are selling not just to weve all noticed the weakness in capital goods orders. So a lot of industrials have suffered from that. But there are a lot of industrials that arent suffering from that. And theyre really facing a different kind of market. One in which actually theres fairly resilient demand in the united states. Hes got postit notes and scotch tape all over his desk. Its unbelievable actually. Ironically in the market the last month or so two of the best far performing stocks are airlines, american and continental. Jetblue you like, its not participated as much, its had a rough year. Are you adding to your position on jetblue . I am. I think nows a great time. We got a pullback a couple days ago because of travel scares with nice and unexpectedly so. But jetblue is not kind of playing in those markets. The furthest they go is really the caribbean. I think theyve done a great job managing the business for future growth. And thats a name that ill continue to buy. Thats amazing. United and american the two best performers. Two of the four youve also got, this morning, seagate and well get it. I cant remember. Well get it. Come to me. It was this morning. We did the show together. It was early. Brian, thank you very much. Brian hennessy and patrick with silv silvercrest management. Go to powerlunch. Cnbc. Com to see another mid cap stock. The mid caps been pretty good that brian likes right now. Kindermorgan. That was the fourth. Four best performers over the past month. Shares of papa johns pizza are higher today. Get this, one analyst says that with everything going on in the world, terrorism, politic, et cetera, that actually could help papa johns. That unusual stock call coming up. Will your business be ready when growth presents itself . Our new cocktail bitters were doing well, but after one tradeshow, we took off. All i could think about was our deadlines racing towards us. A loan would take too long. We needed money, now. My amex card helped me buy the ingredients to fill the orders. Opportunities dont wait around, so you have to be ready for them. Find out how American Express cards and services can help prepare you for growth at open. Com. Ive got a nice long life ahead. Find out how American Express cards and services 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. Now i know ill be able to stick with him. [ male announcer ] with these types of plans, youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. So dont wait. Call now and request this free decision guide to help you better understand medicare. And which aarp Medicare Supplement plan might be best for you. Theres a wide range to choose from. We love to travel and theres so much more to see. So we found a plan that can travel with us. Anywhere in the country. [ male announcer ] join the millions of people who have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp, an Organization Serving the needs of people 50 and over for generations. Remember, all Medicare Supplement insurance plans help cover what medicare doesnt pay. And could save you in outofpocket medical costs. Call now to request your free decision guide. 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. We want to call your attention to whats happening with shares of Anheuserbusch Inbev, spiking after being negative most of the day this on the heels of bloomberg headlines coming out saying regulators could be, again, could be, poised to possibly approve this particular merger. Its said to have won antitrust approval for this particular purchase of s. A. B. Miller. Of course, again, what happens here, guys, is if the deal does go through hypothetically it would of course create the worlds biggest brewer, 170 billion transaction, this also happens on the same day that s. A. B. Miller board of directors meeting. Back to michelle over in cleveland. Thank you very much. Ill take it. Im not michelle, but ill pick it up there, dom. From beer to pizza, seems like a good segue here. Tyler, this is what we referenced in the tease before we get back to michelle, i think this is one of the most interesting stock calls that i have heard in a long time. Keybanc Capital Markets upgra upgrading papa johns pizza. The main thesis is the analyst believes with everything going on in the world, theyve talked to several large operators as they say from terrorism to politics, et cetera, that delivery to home businesses should benefit. Maybe people are staying home, theyre nervous. They just dont want to go out. And the analyst believes the consumer is not going to become what he calls entrenched, in other words hiding in the bunker, but that they will order in more, at least until the november election. So sort of the fear thesis on papa johns from keybanc. Your thoughts. I think its as legitimate a reason to buy papa johns as probably there is. I mean, i dont know whether its absolutely going to be true, but you see it. People dont want to go out and be in large crowds. Maybe theres gun shy bad choice of words, about going to malls, and that could be part of the reason why they shop more from home. Its an interesting call. Just want to highlight it. The stock is moving on it. Could though just be a pie in the sky analyst call. All righty. Lets go back out now to michelle at the rnc. Whats on tap next, michelle . Hey there, tyler. Were watching on the floor here as theyre starting to do rehearsals for tonight. We just saw Newt Gingrich out there getting ready for his speech. Standing by im very happy to say two of my colleagues are here, kelly evans and Carl Quintanilla. Theyre going to join us to chat. Sarah fagan along as well to discuss the hits, runs and errors so far, what needs to be achieved tonight if donald trump wants to win. And a lot more as power lunch continues live from cleveland and the Republican National convention. Your Insurance Company wont replace the full value of your totaled new car. The guy says you picked the wrong insurance plan. No, i picked the wrong Insurance Company. With Liberty Mutual new car replacement™, you wont have to worry about replacing your car because youll get the full value back including depreciation. And if you have more than one Liberty Mutual policy, you qualify for a multipolicy discount, saving you money on your car and home coverage. Call for a free quote today. Liberty stands with you™. Liberty mutual insurance. Wont replace the full value of your totaled new car. The guy says you picked the wrong insurance plan. No, i picked the wrong Insurance Company. With Liberty Mutual new car replacement™, you wont have to worry about replacing your car because youll get the full value back including depreciation. And if you have more than one Liberty Mutual policy, you qualify for a multipolicy discount, saving you money on your car and home coverage. Call for a free quote today. Liberty stands with you™. Liberty mutual insurance. Hello everyone. Im sue herera. Heres your cnbc news update for this hour. Attorney general Loretta Lynch says Police Officers are feeling under siege following the recent attacks in dallas and baton rouge. And that the Justice Department is offering training as one way to help. Certainly Law Enforcement is feeling under siege because of these incidents. And they are tragic. It is a dangerous profession. And so they have continually bourn this weight. And certainly we want to highlight the issues today, use them to start a conversation. A suicide bomber blew himself up at a checkpoint in southern yemen killing four soldiers and wounding six. Officials said the bombers approached the checkpoint in aden and detonated explosives among the soldiers, some of whom were having lunch. Spacex arriving at the International Space station two days after blasting off from cape canaveral. It has delivered more than two tons of supplies to the station including a docking ring, which is necessary for future rocket ships. And trip advisor releasing its list of the most affordable cities for travel this summer. Number one, new orleans. Followed by houston and las vegas. The most expensive cities, orlando. I was just there and it is expensive. Honolulu. And seattle. Thats the news update this hour. Ill send it back over to you, brian. Orlando . Yeah. More expensive than honolulu . Honolulu is second to orlando, yes, because of the theme parkts as and hotel rates high. The universal park is just a great value for the dollar. Youre so bad. You really are. Or im so good, sue. Depends on how you look at it. Thats true. It does, doesnt it . Thank you, sue. All right. Ugly day for silver and gold. Both Precious Metals slightly less precious today. Price of comex gold down 1 , that is 13 an ounce right now. Silver the biggest loser on percentage down 2 today only precious metal moving higher is palladium. We have a news alert right now from scott wapner on herbalife. The alert, brian, herbalife is responding to that call bill ackman held this morning, which wrapped up just a short time ago. We highlighted it on Halftime Report today where mr. Ackman said herbalife attempted to manipulate its stock price following news of that settlement on friday with the ftc. Ackman saying, quote, herbalife has already been shut down by the ftc. They just havent realized it yet. He also suggested that herbalife pushed carl icahn to make positive statements about the company on friday. He said he doubted that mr. Icahn will increase his position to 35 as now allowed by herbalife. So herbalife responding right here to me just a short time ago. Ill quote here, they say after two years of working with the ftc, i think we understand the terms of the Settlement Agreement very well. We would not have settled unless we had the greatest confidence in our ability to thrive. And we believe this will be proven out in a little more than a year from now when we release our results after implementation, end quote. That coming from alan hoffman, he is the executive Vice President of Global Affairs at herbalife. So herbalife responding to some claims made this morning by bill ackman on that her honearnings. There is the stock up 0. 25 , just shy of 65. Interesting turn of phrase herbalife has been shut down but they dont seem to know it just yet. And yet isnt the largest percentage of that companys business nonu. S. . Right. And obviously not subject to the strictures put in place by the ftc, though other regulators in other countries might follow suit. To your point, tyler, i think u. S. Business is only around 20 of the overall business. But bill ackman saying in addition on the call this morning that they are going to work hard to try and persuade International Regulators to put in a similar action that the ftc did in that settlement on friday. Remember, the ftc is essentially forcing herbalife to make dramatic changes to its Business Model as well as pay the 200 million fine, which is one of the largest fines ever imposed by government. But theyre going to have to do a better job, says the ftc, of accounting for actual sales that are made from a retail level not just from distributors purchasing the products themselves. Personal consumption is a part of the framework for that, but the better accounting of actual retail is a very significant move. And a significant part of that settlement. There seems to be, you know, obviously no going away from ackman who reports say is going to keep his short position on the stock as he tries to convince International Regulators to put similar changes as the ftc did in agreeing to that settlement. He is not backing down on herbalife. No, you got that feeling certainly from the call this morning and kate kelly reporting on it on our show just a short time ago. And interview with bill a week or so just before that. Thank you. Quick comment before we go to Rick Santelli, Fortune Magazine reporting that this is costing ackman. Fortune saying 600 million more was pulled out of Pershing Square in the first half of the year and main down 30 since last august. Since last august. Well, the s p 500 is up 4 of the time. So one of the highest paid Fund Managers in the world has underperformed the s p 500 basically by 44 . That is in the investing community, at least in our history, i have not heard of a situation like that. As scott was pointing out last week, i think the assets under management have gone from certainly tens of billions of dollars to well under that amount. If you are down lets just analyze that before we go to rick. Sorry to hog the thing here. If you are down 40 in less than a year, i dont know of any fund that has survived almost double your money to get back to even. To get back to where you were in the entry. Bill ackman a very smart guy but i dont know any fund fallen that much and lived on. Yeah, see index funds come up. Lets get to the bond market. Weve got Rick Santelli tracking action at the cme as the cubbies lose their spot as the Number One Team on a percentage win basis to the giants. Hey, stop that, now. All right. Listen, were going to keep all the dates a couple days before brexit. Were going to move fast. So 6. 21 start to 10s, not quite prebrexit levels. Dollar index, yes, it is. It is surpassed the dax, the german stock market very, very close. We know all our equity markets have blown through those high levels. Look at bunds, much closer than one would think considering minus 20 basis points, jgbs well participated in selloff. You know the laggard, you guessed it, gilts hardly moving off low yields at all. Now lets go to michelle live in cleveland. I just have one question, michelle. Tell me. Put a big gold t on the quicken loan arena yet . A big gold t . Why . What am i missing . Trump. Oh, t, oh, a big gold t. Not yet. He hasnt officially accepted until tomorrow night. Ill suggest that if i see him. He might like it, rick. Rick santelli, thank you. Day three at the Republican National convention after Donald Trumps speech writer offers to resign after allegations that she lifted certain parts of Melania Trumps speech from one once given by Michelle Obama back in 2008. That offer we are told swiftly rejected. That story we got from john harwood be out later in the day. But in a statement Meredith Mciver said yesterday, i offered my resignation to mr. Trump and the trump family, but they rejected it. Mr. Trump told me people make innocent mistakes and we learn and grow from these experiences. Lets bring our cnbc allstar panel on. Kelly evans, Carl Quintanilla, and cnbc contributor sarah fagan. Sarah, is that good enough explanation . Well, it is a good enough explanation. It would have been better had it come yesterday, but the campaign is where it is and theyve now officially tried to close this chapter of the convention. I do think its interesting that they didnt accept her resignation. And its potentially a window into what you hear from people who are around donald trump. Which is he actually is a really kind, compassionate person. It just doesnt always come across that way. Are you saying good thing about donald trump . This is going to be a first, sarah fagen. Thats not true. Ive said lots of good things about donald trump. But i think people who say that who meet with him, who work with him, and his children have really tried to put some definition on donald trump the man. Right. And this might be something they could pivot to as an example. Guys, donald trump didnt just have to try normally conventions are about trying to get the independents, maybe people from the other side to come over. Donald trump has needed to convince the Republican Party to come along with him. Does it appear hes succeeding . I think people are getting used to certainly the rhythm, a different rhythm of this convention, right . I think its kind of like dancing a certain dance when youre used to doing a waltz only, theres less pageantry, more improvisation. Whether its the roll call, the way theyre managing the speech controversy, but i get the feeling starting now theyre getting used to it. I also think this is potentially humanizing. This is the antithesis of getting fired on the apprentice. You made a mistake, you keep your job. Because he obviously sees some potential in this speech writer. What i find interesting actually we were just talking we were driving down here now that im arriving here we got the show coming up in a bit, the protesters, its not really there. You know, today is going to be the day where i think we figure out are people really going to show up en masse. There were 11,000 protesters or Something Like that permitted and expected to show up. Weve heard, yes, there might be American Flag burnings and all these different buses full of people who might be coming. But if you read the local coverage today, the most the thing that stands out the most is the lack of all of that to happen. It is not a factor. It is no 1968, as a lot of people had talked about or predicted. Cleveland has done a very good job with this convention, all around, the security, the location, the way theyve structured it. I think delegates and people have been very happy with at least whats going on inside the city of cleveland. But it could have been ugly. Yes. When protesters want to be ugly it still could. I mean, were getting into the real bulk of it now. Right. Today, tomorrow, these are the big two days. Its been sort of the opposite of how its been inside the arena. Outside the arena its been a little bit calmer. But i think this afternoon will be a bigger test. Also think about the headlines for the weekend, ohio, open carry state, potential for violence coming out of baton rouge and dallas. I will say to a person security has carried themselves with an ere their here to give cleveland a good name. Certainly headliner is indiana governor mike pence because hes the v. P. Whats always fascinating though, i think, is when the former hopefuls have to speak. Right. And were going to hear from ted cruz tonight, lying ted. You go from an ugly primary to now having to endorse the person who actually made it on to the ticket. What does ted cruz say tonight . Well, first of all, were not sure hes going to endorse him. That is everyones assumption. I think there are people i know there are people in cruzs camp who say hes not going to endorse him. Well see what happens tonight. If he endorses him and has potential to be a very big moment for donald trump. If he doesnt, the campaign better get out that and telegraph it now. We dont know that they know. Well, they have people that should know these things. And donald trump ought to have been working ted cruz in advance of this. And this is the moment where you hear people bring it up. I think sarah said 1976, ronald reagan, a speech about gerald ford, really speak for gerald ford, is ted cruz going to pick that approach or is it going to be more about the lesser evil, were battling Hillary Clinton. I think for ted and of course most importantly for governor pence, the party needs to make the pivot to why free market capitalism, why conservativism is the best way to lift people out of poverty. Weve had the indictment out of Hillary Clinton last night. It was very effective. Which was supposed to be a night about the economy by the way. But it was very effectively delivered by governor christie in my view. But tonight we have to start pivoting as a party and talking about our ideas and how were going to help solve problems for real people. Not just but i think if ted cruz personally goes up there and vouches for, you know, the guy who called him lying ted, that will be the moment of the evening or not. Guys, looking forward to it. Thanks so much. Dont forget, all of us tonight. Our special report live from the Republican National convention 10 00 p. M. Eastern time right here on cnbc. Tyler. All right. Thank you very much, michelle. It is the megadeal in the Consumer Products space. Unilever buying the startup Dollar Shave Club for a lot more than a dollar, a billion to be exact. Talk about a big payday for dollar shave investors, well talk to one of them next. Whats happening here . This is my new alert system for whenever anything happens in the market. But thinkorswim already lets you create custom alerts for all the things that are important to you. I guess we dont need the kid anymore. Custom alerts on thinkorswim. Only at td ameritrade. Today, were seeing new technologies make healthcare more personal with patientcentric, digital innovations; from selfmonitoring devices that can interpret personal data and enable targeted care, to Cloud Platforms that invite providers to collaborate with the patients they serve. Thats why over 90 of the top 25 Global Pharmaceutical Companies are turning to cognizant. Our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way Clinical Research sites collaborate with pharmaceutical companies, and enhancing Patient Engagement with innovative platforms and solutions. Our populations growing healthcare needs present growing opportunities for our clients to advance the future of medicine with digital, and improve the quality of lives. Welcome back to power lunch. Im dominic chu. Turkish etf following session, s p cut turkeys Credit Rating deeper into junk territory citing last weeks coup attempt. Rating now stands at double b with a negative outlook which does indicate additional downgrades could possibly follow. S p noted further eroded the countrys institutional checks and balances. Lira also hit a low. Back over to you. Dom, thank you. Well, the Dollar Shave Club should be renamed the billion Dollar Shave Club after today because unilever buying the company for a cool 1 billion. Joining us now, david pachtman, one of the Dollar Shave Clubs largest investors. Youre going to hate this question. Bring it on. But ive got to ask you. Go. How much money did you make today . My firm did really well. We got a 10 x return on our vested capital. How much did you put in . That were not disclosing right now. Just trying to do the math in my head. You could multiply it by ten. Barely. I think your shave could have been closer today. I was a former member of the Dollar Shave Club. Did you not like the other members . Was it a problem with the other members . Any club that allow me in i dont want to be a part of. My point is were americans, we dream, were aspirational. We dream of making money or getting i know youve had some big hits and youre a successful guy, but how big of a win was this . When you heard the news, what did you think . This is a great outcome. I invested early in the company 2012, just like the rest of the internet i was sitting at my desk and saw that viral video launch now more than 20 Million People have seen and cost less than 5,000 to make. It exploded. It broke the internet. It crashed their website. I said this guys obviously a genius marketer, but subscription businesses with really low churn, high loyalty in very large markets go ahead. Im sorry. In four years. Yeah. More than 15 market share. You made a tenfold return. Yeah. And you got 15 market share in the blade shave market. Yeah. In the mens u. S. Market. Thats whats remarkable. You mention churn. Talk to me a little bit about that. He says hes a former customer. Yeah. How long does the average customer stay with it . How many guys stay with it for more than a year . They have the lowest churn, monthly churn, ive seen in any consumer subscription products business. Theyre about as low as cable tv and mobile phones. Below 10 . Far below 10 . Far below 10 per month. Much, much more. What i love about the story, forget about the former membership thing. What i love about this story about ubers and others, that in the age of Virtual Reality and crazy tech, some of the most successful private companies we have seen lately are decidedly low tech. Uber, with all due respect, sends somebody to your house or wherever you are and get in your car and drive off. This was sending razor blades by mail. Are there many more of these scaleable opportunities out there . First of all i think its a bit deceptive. Theres a crazy amount of technology at this company. Theres Machine Learning and data science and all sorts of stuff consumers. I agree with you. What was really going on here is all of our attention has shifted away from legacy media to mobile phones and social networks. Thats where all the conversation is. And the legacy brands arent good at having conversations there. This is a company that created new media products, new Media Advertising that reached consumers in a conversational way, build a huge amount of share for low amount of money. Whats the danger to this brand of going from a privately owned where theyre the big dog in the house to a Multinational Company that has 500 brands, maybe. Some companies are great at buying other companies, and some arent. Unilever is really good at it actually. Generally the m. O. Is you buy a company, you leave them alone. One of the things unilever says is congratulations, Dollar Shave Club, you just acquired unilever. You now have the resources of unilever to propel you but were not going to tell you what to do. David, we got to go, amazing story. Congratulations. Unilever u. S. Headquarters right next door, so as you head back down that way, run in, throw a bunch of hundreds in the lobby and run out. Thanks, guys. They would appreciate it. Nice shave by the way. Thank you. Looking good. Not as nice as mine. Lets get a market flash with dom chu. So from razors to soup. Campbells soup taking a dip in midday trade this after headlines coming out of its investor day saying they now see 2016 sales down between 1 and 2 from a prior estimate of flat to down 1 . Thats whats moving those stocks. And of course, tyler, food stocks have been a huge focus given the focus of investors on dividend payers, ty. Back to you. Dom, thank you very much. Twitter just banned one of its most polarizing users, banned them. He says its the end of twitter and hes live on power lunch next. Controversial guest coming up after this. Those new glasses . They are. Do i look smarter . Yeah, a little. Youre making money now, are you investing . Well, ive been doing some research. Let me introduce you to our broker. How much does he charge . I dont know. Okay. Uh, do you get your fees back if youre not happy . dad laughs wow, youre laughing. Thats not the way the world works. Well, the worlds changing. Are you asking enough questions about the way your wealth is managed . Wealth management, at charles schwab. male 1 rock crawling is great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Welcome back to power lunch. Im Michelle Carusocabrera live at the rnc in cleveland. On monday lesley jones quit twitter following a series of racest and sexist attacks. Ceo jack dorsey reached out quickly and the social Media Company promised to take action. Later permanently suspended from twitter, though the company did not specifically cite the conflict with jones, the suspension came after this tweet was posted to his more than 380,000 followers. If at first you dont succeed because youre work is terrible, play the victim. Everyone gets hate mail, ffs. Which i assure you does not stand for french fries and salad. Joining us now is joining Us Technology editor with brightbart. Com. Thanks for having me. Youve been permanently banned from twitter. I have. Youve been pretty mean through the years on twitter. Ive been pretty mean through the years on twitter. Yes. But i dont think thats a reason to excise somebody from the platform. You know, actually plenty of people enjoy what i do, over 380,000 of them as you say enjoy what doi and theres no suggestion whatsoever i was involved in any kind of racist or sexist harassment of leslie jones. What i did is dislike her movie, after that teased her on twitter. If a journalist cant tease a hollywood blockbuster actress, i dont know what this platform is about. Many of your followers started to attack her as well. I mean, some of those things were brutal. And your acknowledge. Yes, of course. And some are completely disgu disgusting. But im not responsible for what other people post on the internet. Is Justin Bieber responsible when his fans cut themselves. Is beyonce responsible, of course not. Its preposterous for what other people post on the internet. Let me read to you what you wrote in 2012. The internet is not a human right, we ban drunks from driving because theyre a danger to oethers. Isnt it the time we did same to trolls, people who who are mean on twitter. You wrote this, right . No, of course. What happened . You dont agree with this anymore . I agree with it entirely. Twitter is a private company. Entitled to do what it likes. The problem is its lying to users. Jack dorsey says free speech platform of the free speech wing of the free speech party, twitter is a place you go if you want to express yourself. Thats a lie. There is a systemic campaign against conservative and libertarian points of view on twitter. How do we know this . Not from the companys own notoriously opaque statements but the fact they apply their own rules so capriciously and inconsistently theres only one explanation. Twitter is perfectly happy to host isis, to host Death Threats from donald trump supporters. They try to take those down. Not hard enough. You make a joke about a feminist or dislike the new ghostbusters movie or have the audacity to dislike somebodys movie we have just statements and policies available on their website. Our rules prohibit inciting or engaging in the targets abuse or harassment of others. Over the past 48 hours in particular weve seen an uptick in the number of accounts violating these policies and have taken Enforcement Actions against these accounts. Ranging from warnings that also require the deletion of tweets, violating our policies to permanent suspension. Absolutely no evidence whatsoever. And twitter has produced none in any way im responsible for inciting harassment against somebody else. Its an absurd claim. Theres no proof of it what there is proof of is leslie jones did not like my review. I teased leslie jones a little on twitter. No big deal, people do that all the time. The reason they have come for me i have been public enemy number one for twitter for a very long time. You acknowledge its a private company it can do what it wants. Of course. But has to be honest with users. It can change its rules any time it wants. Of course. Whats going to happen if twitter does change rules to clamp down on all the most fun people, interesting people in its network, people are going to leave. Twitters investors should be worry. Theyre concerned with the time people spend on the site and key users. Investors are such the opposite, its a mean place, theyve struggled with growth. Thats a separate but related problem because twitters product is terrible. And twitters product has always been terrible. Why is it terrible . Its befudling for users. Nobody understands how it works. Its not intuitive like facebook is. And if twitter had at the start built tools to deal with different groups of people who dont really want to hear from each other, this problem never would have happened. What do you do about the fact that the internet has become a very mean place . Why is that . And you yourself endorsed i endorse free speech. I endorse peoples right to be mean, aggressive, mischiefous and dissident and fun. In that piece you wrote for the colonel you acknowledged how painful it can be. Yes. When youre on the receiving end. My view is not going to be popular with everybody, but it is popular with a lot of people. If you cant stand the heat, get out of the kitchen. My observation in this particular case is this movie is not doing well. I suspect leslie jones has been deployed on twitter speak to the bigger herb sis. Is there a decline in civility . Yes, one thing im observed is there is a particular political slant to a lot of this abuse and harassment stuff. Much of it is used ideology, much of it is used to criticize libertarian and conservative points of view. Were all in public life, we all get Death Threats, rape threats, bomb threats, but any one particular side of the political side that makes hay out of them that in fact turns them into a sort of career. You are also the leader of gays for trump, is that correct . Im not a leader but did host a party last night. It was fantastic. A party for daddy, i call him daddy. Why . I want him the father of the nation. Ive come here as a warning from europe to you people, what happens when you clamp down on too much free speech. The key importance of the first and Second Amendments were seeing it happen in europe. Were seeing islamization of europe, clamp down on free speech. Knottingham its now an arrestable offense to be misogynist. When donald trump talks about banning muslims, you dont see that as contradictory to everything you just said . No, i dont. America is founded on freedoms. America is founded on the constitution, the first and Second Amendment, and it is modern western liberal Democratic Capitalism that gave women and gays and blacks the rights they enjoy. And where those things dont exist elsewhere in the world, women and gays have a much worse time by preventing, you know, immigration from a culture that wants me dead, frankly, it is a protection freedom. Im going to stop you for one second. We have live pictures coming in of Donald Trumps plane arriving in cleveland. There you see coming into town. He doesnt speak officially until tomorrow night. But donald trump arriving in cleveland. Daddy force one. Daddy force one. I do. When im press secretary i want deben air force one. Thank you very much for joining us. Thank you. Lets turn now to the countdown to tonights big speeches at the convention. Well hear from mike pence and ted cruz in primetime. First though, lets get to eamon javers whos outside where todays a little hotter outside than it has been the last couple of days. Eamon. Yeah, hi, michelle. Were here in Public Square in downtown cleveland. This is sort of the epicenter of the protest activity here at the Republican National convention. What we have right here is a beautiful sunny day in july. And what i would describe as a big american political spectacle out here. Every possible side of the political spectrum is represented out here. Weve got one protester showed up here with an ar15 protesting in favor of his Second Amendment right. He told me yesterday his weapon is not loaded here. On this side weve got some antigay protesters who are speaking theyre separated by this line of california Highway Patrol and ohio state police. From this group over here, which has a sign up saying theyre queers against racism, like i say, youve got a very diverse mix of opinions out here. Just about everybody represented. It is calm, it is peaceful. Everyone is having their say. And police are doing a very good job of sort of separating the two sides ideology and keeping everything toned down. Thats kind of the mood out here right now, michelle. Well wait and see what happens throughout the day. Yesterday we did see some very intense protests. They didnt heat up until later in the day though, michelle. Yeah, well be watching for that. Definitely the police have won accolades as a result of their performance thus far during the convention. Brian, we have a lot more coming up including ben carson. Michelle, were going to look forward to that. Thank you very much. Lets get back now to stocks and markets. Dow on place to close higher for a ninth consecutive day, one of the biggest runs we have had in a while. And, yes, earnings are a big part of that. And tonight we are going to be watching reports from two big tech companies, intel and qualcomm. They are both out after the bell. Here with key thigpens to watch veejay, first off, lets start with intel to you whachlt are the one or two keys to tonights report . Yeah, obviously i think commentary on the pc side, so what they talk about on Pc Data Center and outlook for the second half will be key in how they view longer term trends on the data center side. So thats on intel. And qualcomm obviously, you know, whats happening in ha handsets. They have had issues in terms of market share. Theyve been losing market share on the chip side, so those were the two, you know, focus points on intel and qualcomm. We talk about the pc business with intel, but its kind of hard to talk about because it doesnt seem to be much of a pc business anymore. What is intel . Is it still just a chip company for a computer . Or is there another growing aspect, kind of Like Amazon Web Services that we dont know about as much yet but has Great Potential . Thats right, brian. I think if you look at the pc side, obviously its been expectations pretty low. Looking for a bit of rebound in the second half. So that helps, but key cornerstone is data center. Thats where the market is, thats where the margin is, thats where the profit is. So theyre basically chasing that down. They dominated that market. But if you also look at iot, thats another market theyre chasing. Internet of things. Thats right. So i think thats on the market they want to go after. So theyre definitely trying to change their stripes. Last earnings for the first time they admitted that the pc side is a little weak, massive restructuring going on 12,000 employees there. So definitely trying to reposition more the data center the good side of things. What would make this company do what microsoft has done . By which i mean, have a stock that punches out of the range in which it has lived for the last decade. I think its a little bit more difficult on this side because its a hardware company. Hardware always tends to have issues with margins. But less than cloud more scaleable. So i think thats where intel is trying to go after larger markets, internet of things for example. But it will take a little bit of time to get that moving versus where the pc market is or where the handset market is. Definitely in terms of profitability data center is where their going to put all the money in, that and acquisition thats been working out well. So well see them slowly build out the internet of things. Where do you see this stock in five years . Thats a good question. I think, you know, the longer term obviously the focus will be on data center, where is the spending going to go. As you look at the cloud, hyperscale guys, we should see them start to reaccelerate spending in the back half. Last year was a little tough, so all this should help. But longer term you can see a lot of these news year to year, facebook, twitter, they consume a lot more cloud data traffic going up almost 20 , 25 . So you should see them become a much more data centeric Company Going forward. Our data center is going down. They are definitely moving away from the pc side. Keys to qualcomm, quickly. Yeah, absolutely. Qualcomm, i think we have a neutral on it. Obviously the issue there is theyve done a pretty good job on licensing, trying to get more licenses back in the fold, but issue youre losing share on the chip side at first. On the iphone side they have lost share to intel, in china obviously media tech had up 30 units quarter for june where qualcomm actually guided units down about 2 sequentially. In the back half you get these challenges where they might be losing share in china where oems are trying to move away from using qualcomm chips. So i think thats a challenge that qualcomm faces. But on a valuation basis in terms of getting some of the licenses back in the fold theyve done a good job. All right. Going to be a busy night for you, vijay, thank you. See you soon. Thanks a lot, brian. Those are not the only Companies Reporting earnings tonight, American Express also out. Investors hoping for some good news. And they need it. The stock is down 19 over the past year. Bob napalese with William Blair has outperform and orrin buck with credit suisse. Start with you, youve been negative, right on that call so far. What would you need to hear tonight from American Express to change your rating to be more positive on the stock . Well, i think the Company Really needs to address the fact that its rewards are substantially lower than its peers. They also have Unrealistic Expectations for earnings for next year 2017. Rewards, are you talking literally membership rewards . Well, both membership yeah. Primarily membership rewards. But also if you think about the cash back that they give to consumers, theyve been accruing at a substantially lower rate than their peers. And the market has moved away from them as big banks have pushed that level higher and higher. This is an interesting thing just from a personal perspective. If you notice youre a heavy am exuser as i used to be, you build up a couple hundred thousand membership wards and realize you can get a toaster. So you start to look at other cards. Are you saying thats actually a thing . This is happening to am ex en masse . Its a thing because what they do is theyve been introducing lower cost options saying were giving the consumer more choice, but theyve been driving down their expenses as a result. The problem is that the growth rate of their proprietary charge card spending in the u. S. Is half that of Everything Else. Because people are just doing what youve done and going to use cards that give them richer rewards. Bob, youve got an outperform on this stock. Id like you to respond to what mosha just said and this hypothesis of mine. I am a consumer of their products. I like it. But im an aging baby boomer, and am ex feels to me like a nonmillenial kind of company. Thats not right. New cards, first of all theyre signing record numbers of new accounts. A lot of that is coming digital. And most of that the majority are millennial. So the theory that this doesnt play the millennials is not right. This company does provide the best service of any card company out there. The rewards are the easiest to use, as mosha said there is competition on the reward side. The competition isnt on the Net Interest Margin or on loosening credit. I think it is onto rewards. And that is there is pressure across the industry. But American Express is getting more than their fair share. I think kcostco has been the bi issue. Costco just ran off a quarter or two from now we wont be talking about costco. The 560 guidance for next year can they hit that 560 and the key is looking at the underlying metrics excluding costco. Theyre getting they had 8 spending growth, which is generally in line with the industry last quarter x costco so theyre not well below the industry. They have huge opportunity internationally. They have the largest corporate card, 30 of the business is a corporate card, 25 is more like mastercard, visa, merchant acquiring Global Network services, thats very high return on equity. They have tons of excess capital. The key is can they get to that 560 level or around there and then grow that at a double digit pace. Historically theyve had a market multiple, which is 18 times today, today theyre closer to 11. We think that the valuation will gravitate towards that market multiple as they show this is still good growth company. Im interested to hear you say theyre very secure with the millennials, i wouldnt have thought it. And youve clearly got the facts. They certainly do for my money have the best service of any of the card companies. Gentlemen, we have to leave it there. Appreciate it. Thank you. Thank you. Well, along with politics and corporate earnings, the other big story out there today, the future of roger ailes at fox. Is he close to being forced out . Lets take a look at 21st century fox shares down 4 in a month perhaps on this news. Were going to talk about it with Michael Wolff who wrote a fascinating article today. Hes your guest coming up. Well, we continue to follow the unfolding drama at fox news. Sources telling cnbc that roger ailes and twentyiest century fox are negotiating over the terms of his exit. This comes in the wake of a Sexual Harassment suit followed by former anchor Gretchen Carlson. Lets bring in michael wolf from the Republican National convention. He has written on the media for usa today, hollywood reporter, vanity fair, among others, also the author of the the man who owns the news, the secret world of Rupert Murdoch. Michael, nice to have you back. Nice to be here. This story is everything to me fox has been able to avoid over the years, leaks, dissent, internal strife, lack of message and message discipline. But my key question for you is how painful is this for Rupert Murdoch himself . I think it goes beyond painful for rupert. I think that the sign that roger ailes may be out is effectively a sign that rupert is out. Now, rupert is not being fired in the conventional way, but ruperts sons, who are the cochief operators of the company, have, i believe, and i believe this is the ailes situation is a firm indication they are at the point of moving their father however gently, however firmly out of the Main Management ring of the company. And rupert, by reports, is on vacation in the south of france or the mediterranean though in touch by phone. Mr. Ailes and the sons, james and lachlin have had a long and somewhat checkered history, but in your article you seem to suggest it is mostly james who is driving this. It is. I think lachlin is very much his fathers son and has made every effort to get along with roger ailes. And i think they have relatively speaking a decent rapport. James and roger are oil and water, they dislike each other. They loathe each other, i would say. James is has and james is kind of an obsessive and his obsessive point since for many years now and certainly in the year hes been on top of the company has been roger has to go. Michael, i want to ask you a question. First were going to show live pictures of donald trump arriving. His helicopter has landed. There you see indiana governor mike pence, surrounded by his family as he arrives here in cleveland. Lots of talk about roger ailes. Obviously here, at the rnc. The establishment sees the rise of donald trump and the fall of roger ailes in the same week as some kind of depending on what side youre on, the apocalypse or very bad coincidence in history or what . Also its which is the bigger story, the fall of roger ailes or the rise of donald trump . Lets remember that roger ailes has been, may be the dominant player in the Republican Party in the conservative movement in america for in the messaging certainly. Yeah, for at least almost 20 years now. So what happens now . What happens if you lose that message maker . And hes been incredibly stable, coherent, on message guy. Should donald trump hire him . I think he may have created the term on message. Should donald trump hire him . Thats the rumor thats going around everywhere that roger will leave fox and take Paul Manaforts job. Do you believe that . I tend not to believe these kinds of things, but i certainly didnt believe that donald trump would be the republican nominee. Youre not the only one. Brian. Yeah, you know, michael, what do you think would happen, ailes moves on, does it change fox at all . Not from a management perspective. Obviously that would be the case. Would you see fox news, fox business whatever evolving in any way with the people likely to replace him . Very much. I think fox news as we know it is entirely dependent on roger ailes. He created it. He sustains it. Every detail of what happens there is a detail that roger ailes controls. What has it become now . I think it becomes Something Else certainly. Were going to interrupt you for one second and listen to donald trump. Your whole family is an incredible family. And we love having you with us in this endeavor. And hopefully were going to do an amazing job and amazing job for the country most importantly. So thank you very much. Congratulations, fantastic job. Thank you very much. Thank you everybody. Well go and start working. Pretty short winded for donald trump wrapping up his remarks as he lands here in cleveland as he gets underway with indiana governor mike pence. Yeah, youre not the only one whos surprised to be where we are with donald trump in the Republican Party. Why do you think this has happened . You know, if id only knew. If ive only heard one coherent answer to that, which i havent. Were in as media professionals who are supposed to understand whats going on, were in this very odd place, which is that we have no idea. Michael wolff, thank you so much. I thought there would be other questions from the studio, but i guess not. Go enjoy the rest of your coverage of the convention. Thanks. Tune in tonight 10 00 p. M. Eastern time for a cnbc special live from the Republican National convention. Tyler. All right, michelle. A big percentage of independent Business Owners say they still dont know who theyre going to vote for. Which candidate is better for Small Business . Plus, well talk to the congressman who wants to simplify the tax code so much that you could file it on the back of a postcard. Ive heard this one before, probably for 35 years. How would that work . Well ask representative kevin brady coming up on power lunch. You bothe a perft drivg record go through t roo th your e perfect. For iverwith cident forgiveness, liberttual t raise yo rates due your fit acdent. D if you do have an accident, our cl centers e avlato aist you enfour seven. Call our cl centers e avlato aist you for a free quo today. Libey mual insurance. Hello everyone. Im sue herera. Here is your cnbc news update at this hour. British Prime Minister theresa may making her first overseas trip as britains new leader. She met with german chancellor Angela Merkel who will be a key figure in negotiating britains exit from the european union. The two stressing the ties between their countries will remain despite brexit. A seaplane making its inaugural flight crashed into a highway bridge outside of shanghai killing five people onboard. The cessna 208b operated by joy air was carrying two crew members and eight passengers. The five others onboard were taken to a hospital for treatment. A man who allegedly encouraged the killing of Police Officers online made his first appearance in court. Arthur jordan arraigned on state charges at the buffalo courthouse. He was arrested friday after posing threats to Buffalo Police on social media. And take a look at this. Wow. A group of whale watchers had a very Close Encounter with a humpback whale off sidney, australias northern beaches. The moment captured in that photo showing the whale breaching out of the ocean very close to the boat. Im surprised the wake didnt capsize the boat. Wow. Thats the news update. Ill send it back over to you, brian. You ever been on a whale watching trip, sue . I have out in california all the time. So you know the boats arent allowed to go up to the whales, but the good captains will try to anticipate where they will breach. Yep. Because then its like, oh, the whale just jumped out. There you go. That guy did a good job. Either a really good captain or ahab. If we had put together earlier segment on Dollar Shave Club and that we could have shave the whales. Shave the whales. Speaking of a close shave, there you go. Even im ashamed of that one and that says a lot. Sue, thank you. Youre welcome, guys. All right. The oil market, crude not whale is set to close for the day. Lets go now to jackie di angelis at the nymex. Good afternoon to you, brian. After starting the session lower, crude took a major reversal today rebounding into positive territory. But august crude is going to close just under 45 a barrel. The reversal came after markets digested the department of Energy Inventory number. It was a drawdown, which was bullish on its face, but that strong dollar today kept crude down early in the session. When we reach those key technical lows, people got in and bought. We also have expiration today, september going on the board after the close, but this choppiness expected to continue. Back to you. Thank you, jackie deangelis. A big percentage of independent Company Owners say they still do not know who they are going to vote for. So, which candidate is better for Small Business . Find out next. Mole tring desk, so can take my trang you kn thathinkorswimseamlesslys across all your vis. The marketsot. Sync your plformn y device with thinkorswim. Narrnarrator best place. Is in t fort. Kubo narrmonkey so gradt even. Ved one naat and explore aworld of psi. Kubo its beauful. Naatorsit discoverthefest. Or find the closest forest or pao you. Now is a gd ti to get theball r. Medicare options until 65. Medicare only covers about eightyercent of part b medalosts. The rest iup to yo thats whe aarp medicaresupplems insured by unitedhealthcare surance company me in. Like all standardized medicare sument insurance plans, they couldelp save you in outofpocket medical costs. Taking informed steps really mas a difference later. Ats what eans to go long™. Call now and request this free deon guide and explore the range of aarp Medicare Supplement plans. L plans like these let you choose any doctor or hospital that accepts medicarpatients. These are the only Medicare Supplement iurance plans endors by aarp. Call n and request your free decision guide. These are the only Medicare Supplement iurance plans and start gathering the information you need to help you go lon™. Donald trump and Hillary Clinton both may want to target small Business Owners. According to a new study 35 of small Business Owners still undecided about who to vote for. A look at where the candidates stand on the issues that are nearest and dearest to Small Business. Absolutely. Tyler. Recap that poll you mentioned. When looking at candidates takes on main street, you can see why small Business Owners might be undecided. There hasnt been much detail or emphasis on things that matter the most to them. Manta, small partisan Networking Program found what you said 35 of small Business Owners say theyre still undecided, meanwhile 37 say theyre in favor of donald trump and 28 say that they are voting for Hillary Clinton. The survey also found 86 plan to actually vote in this years election. Both trump and clinton have yet to lay out their formal Small Business plans. So on key issues like wages, clinton is in favor of a 12 federal minimum while trump has been noncommittal on a plan, clinton says she wants to ease regulations and red tape without specifics while trump has put forth a simplified tax code that will help small Business Owners who file at the individual level. Finally, on health care reform, which is another major issue for Small Companies, clinton supports obamacare while trump vows to get rid of it on day one. Its unclear though how either plan would impact the employer mandate which requires Small Companies to offer their workers snus insurance. Bottom line advocates tell me both candidates will have a lot of work to do before they start securing support from Small Businesses. And a lot of undecideds. I think thats a huge number of undecideds. Its actually shocking. Yeah. Right . Because the candidates are so diametrically opposite in so many different ways, i havent met anybody that doesnt have a very clear view of he or she is voting for at this point. I just went through some of the issues, were talking red tape and regulations, if Hillary Clinton says were going to ease red tape and regulations, what regulations . Ill give you an example, one thats close to our hearts as virginia guys. Actually talked to my mother yesterday. Uhhuh. Because it was my birthday. Good son and happy birthday. My mother called me up. Thanks, mom, i love you if youre watching. We talked about virginia. Virginia used to be a very red state. I know a lot of people in virginia who will tell you that they are republican, but theyre going to vote clinton because they own a business that is reliant on federal government spending, especially in the d. C. Corridor. Software company, consulting firm, they need bigger government. Thats what they want. More government contracts. They dont want to hear someone say im going to cut public spending, im a republican but i like my home. I was stunned when virginia went democratic in 2008. Had not happened since 1964. I think it says something about main street if youre willing to vote across party lines for the sake of your business the kind of state theyre in. I will wear a virginia cavaliers Football Jersey on any day of your choice if virginia goes republican. If it goes republican. It will go democrat. Because i believe the d. C. Area its the d. C. Area. Youre right about that. Everybody i know, thats where youre from, i went to virginia tech, a lot of alum there, they all in some way make money off the government. Its growing and growing. Kate, thank you. Good to see you. Come to virginia some time. I will. You go to maryland all the time. Just drive a little further south. All right, all right. Ill see you at the delaware house. I went to university of delaware. Michelle is there, lets go to cleveland. Lets talk about more and more and more government. Joining us now the Republican National convention Cnbcs John Harwood and house ways and Means Committee chairman representative kevin brady. Good to have you here. John, take it away. Well, first of all, mr. Chairman, i got to congratulate you. When we talked a couple months ago you said House Republicans were going to break the sevenyear losing streak to democrats in the congressional baseball game. And you did it. Thats a good sign for the election. This is a game thats been played since 1909. Raises half a Million Dollars for charity, but its real fastball in that stadium and we pulled it out 87. And someone on the set went 3 for 3. I dont know if it was you or michelle. But it might be you. Okay. So Paul Manafort, the Trump Campaign chairman, said this is Donald Trumps convention. Its Donald Trumps party now. Are you a donald trump chairman of the house ways and Means Committee . We are backing this ticket in a big way. The earlier segment about Small Businesses, theres no question about whos all in for growth, both donald trump, mike pence, Republican Party, new tax code, easier regulations, eliminating the death tax, eliminating the obamacare mandates and taxes. Well, theres no question if growth is what youre voting on, growth for a jobs and economy, the republican tickets the answer. But let me ask you how you marry those tax plans. Because your tax plan is quite different from Donald Trumps. Donald trump is the king of debt. You would tax business interest in your plan. Donald trump favors continuing worldwide taxation of business income. You go to a territorial system. When you guys, if hes elected, and it comes time to write the tax code, does his plan take precedence . You know, House Republicans in the ways and means always lead constitutionally on tax. The blueprint, ill tell you when i look at it theyre almost kissing cousins here in the sense going all in for lower rates for businesses, large or small, being competitive, leapfrogging from dead last to among the elite packs. Youre 33, hes down to 25. He is. But some areas on the business side of growth, no longer taxing companies around the world, ours is zero tax rate to bring those profits back to the u. S. For the first time we eliminate every incentive through jobs, manufacturing, research headquarters, offshore and for us expensing full and immediate business expensing unlimited. So youre not giving up your plan for his. No, no. Ill tell you what, there is a lot in common here. And im excited about working with him. Are you convinced hes been able to bring over all the dissident republicans who desperately wanted him not to be on the ticket . Not yet. Hes clearly working on it. Look, we have a party strong personality. Thats actually a good thing. Where i see our convention unifying is behind issues. Like tax reform. Like welfare reform. Like health care and energy type issues. And i think the other day i want to see president ial election be a contest of issues, not just personalities. Can he say anything tomorrow night that gets the never trump people onboard . Yeah, and i think it is focused on issues. Look, were republicans, i dont care where youre at spectrum is we need to fix this broken tax code, grow the economy, secure borders in a smart way, relieve that red tape on the local Small Businesses. I actually think issues are where we unify. Well, so when he says in his speech tomorrow night hes going to rip up the transpacific partnership, how does that unite the Republican Party . Because youve been working toward potentially getting that approved this year. Yeah, i think theres room to work with our nominee on trade. He wants stronger enforcement, so do we. We want better agreements, so do we. I think theres more work to be done on the transpacific partnership. Ill make the case you dont think this is the worst trade deal in history like he says . No. Were going to make the case and he agrees its not enough to simply buy american, we have to sell american around the world. These trade agreements essentially insist if youre going to sell in the u. S. , we get to sell twoway back in your country. When we do that, were amazingly successful. America is good on the trade level playing field. Were going to make that case. Important ted cruz say the words i endorse donald trump when he speaks tonight . Not necessarily. I think the key there is to talk about unifying behind principles, behind issues, going into november understanding whats at stake. I think thats the most important element of his talk. Last question. Last night on the floor you had Chris Christie leading a mock trial of Hillary Clinton that included chance to lock her up. Are you comfortable with that . You know, i actually think laying out the case against Hillary Clinton doesnt have to go to that level. Because i think its damning enough, both her leadership or lack of leadership on state affairs globally, her reversals on almost every issue. I dont think she can be trusted in the presidency. Thats where i would focus. Representative brady, thanks so much for joining us. John harwood, thanks for bringing us such an important guest here at the r inc. Tune in tonight at 10 00 p. M. Eastern time for a cnbc special. Joining us next, larry kudlow. Power back in two minutes. All y, and now it 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 mercedesenz dealer. Mercedesbenz. The best or nothing. My m. About my toothpasteice. She eveand mouthwash. Ice. But shes a dentist so. I kind of have to listen. She said jen, go pro with crest prohealth advanced. Advance to healthier gums. And stronger teeth from day one. Using crest toothpaste and mouthwash makes my. Whole mouth feel awesome. And my teeth are stronger too. Crestpro health advanced. Is superior to colgate total. In these 5 areas dentists check. This check up . So good. Go pro with crest prohealth advanced. Moms right. Again welcome back to power lunch. It is now official. According to Anheuserbusch Inbev they have now secured u. S. Department of justice antitrust approval for their pending acquisition of sabmiller given certain conditions for both here and abroad, this is the next big step that needs to be taken for this deal to be completed. They say in a statement the Company Reaffirms its expectation to close the global transaction in the second half of 2016. Of course, michelle, there are still other Regulatory Approvals to get, but this is a very large one, the u. S. Clearing the way for this particular beer deal. Michelle, back to you. Certainly is, dom, thanks for bringing that to us. Show you the scene here in cleveland. Just moments ago when donald trump landed for the day via chopper here near the convention center. Im joined now by larry kudlow, cnbc contributor and informal advisor to the Trump Campaign. Hes here in town again, larry. Tonight, ted cruz speaks, is it important that he endorses donald trump . I dont think its vital, but i think it would be a good thing, absolutely. I dont know where they are in their conversations. Theyve resumed conversations, as you know. So we will see. Only mr. Cruz knows. But id like to see it personally. Uhhuh. The Trump Campaign came out with an explanation of what happened with melanias trump speech. What was their latest . That the speech writer had a conversation with her, this is John Harwoods reporting and statement from the campaign as well, had a conversation with her and that Melania Trump actually admired admires Michelle Obama. Uhhuh. Quoted some older speeches from various first ladies, that was part of it. And the speech writer ended up putting it in the speech. Well, you know, its funny. That was my solution from day one when i heard about it that melania should just say that she admired these values from Michelle Obama and she shares most of them and just put her in the speech. Nothing wrong with that. Would have been a nice touch. I think the dodging and weaving was not helpful. Having said all that, this to me is a big nothing. I think its going to pass. I think its already passing. Is donald trump sealing the deal here . This challenge was to get the establishment onboard. Is that happening here or not . I think the answer is yes. Its not going to be perfect. Okay. It never is, by the way. Ive been to a few of these things, theres always some dissenters going on. I think the mike pence speech is going to be very important. And im wondering, i dont know what we know, but im wondering if mr. Trump isnt going to introduce mr. Pence tonight. I cant say that. Im just wondering out loud as you know i sometimes do. But the pence speech has got to be optimistic, growth, we know the countrys in rough shape at home and abroad. And hes got to Say Something and i want mr. Trump to say also, we can fix it. We have done this in the past. You know, i worked for reagan years ago, things looked hopeless. Okay. Domestically and internationally. It can be fixed. It was fixed with a lot of strength. I want mr. Pence, and i want mr. Trump to convey that message that we are not bogged down, we dont believe in secular stagnation, we dont accept the islamic muslim terrorism or any of that stuff. Were going to take strong actions. For example, trump the other day said if elected im going to declare war. I personally think thats essential that we do that and follow it up. Okay. So just communicate solving problems. We can do this. And im sorry the other gang didnt, but it is time for change. I think thats a really important message. Well, were going to find out tonight. Thank you, larry. My pleasure. Make sure you tune in tonight 10 00 p. M. Eastern time for a cnbc live special from the Republican National convention. Brian. All right, michelle, thank you very much. Well look forward to that tonight. Meantime, back to the markets here. Shares of verizon are up 20 this year, does it have more room to run . Or is the run done . Were going to have one analysts take coming up in a solo street talk. Stick around. 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. [suspensful music] it is time for street talk. Calls of the day and once again a solo version. Lets do it. Am i ready . Im ready. Lets go. Stock one, verizon. Up 20 this year but one firm says that run likely done. Oppenheimer cutting it to a perform. Neutral from outperform. Optimistic on verizon longterm. But analyst noting a few things. One 2 bucks above target price. Two, hiding on mini metrics. Three, upcoming speck truck options traditionally hurt wireless companies. Also potential costcutting iphones. Run maybe done on very r verizon and money made. Paenera bread, analyst say stocks for three things, earnings growth, survey about the brand and analysts believe margins have upside ahead. Maybe that has to do with automation. My local paenera, maybe yours too, ordering kiosks. Rbc setting target at 250 about 18 upside. Finally your smaller cap under the radar name, Scripps Network interactive based in knoxville tennessee. You may not know their Parent Company but you know their brands. Travel network, home and garden tv. Upgrading sni to buy from hold establish new 75 target and say people are finding their channels on the dials even what they call ott. Over the top. Get to know that. It means like apple tv or direct channels put on whatever device you might use. The analyst believes the strength of food network and others are so strong that no matter how skinny your cable bundle is, no matter what you pick that will be there. The food channel will be there. And the target on sni 75 so we never talk about this company but in our business they have a lot of brnds that are worth a lot of money. And it began as an offshoot, as i under, of Scripps Howard medical. Research, whatever. And publishing. And it morph need that. It is right there with cnbc. I read book last year, cant remember, some of our viewers, about the food network which scripps did. Very fascinating. Skinny bundle. How can it be skinny love. Thats benny bear. Looking for value for you today, we talk microsoft, stocks surging after earnings. Is that a sign of big things to come from big tech or just one off microsoft bang . Boris, what do you think . Microsoft, you know, predictor of great things or just a microsoft story . I think short term microsoft story. Im not a buyer of microsoft. The cloud worked but Everything Else is not working. Bottom line is Everything Else on consumer side from microsoft is con scripted. You are never going to buy microsoft products unless you have to. I think ultimately thats negative for the stock. Even though they did very well on the cloud. Im an big believer into this big move today. Okay. Dennis, you look tend to look at options side. What are you seeing about microsoft that maybe extrapolating that story out . Yeah, im looking at on the microsoft side is not so much around, you know, their earnings were good, but the other story about this is this is a stock thats now a yield stock. So we see it similar to cocacola, philip morris, proctor and gamble. Those stocks have about 3 dividend yield. Microsoft now pays at 2. 5 dividend and trades roughly at 26 pe. That is something to become a value stock. Microsoft is an established company. Its been around and has good cash flow. So you see people investing in those stocks. I think there is growth there. I think there is growth in microsoft and linkedin and things they are doing that you will see in cocacola. Thank you very much. Trading to trading nation on cnbc. Com. In a bit, power lunch, back in two. Now the latest from trading nation. Cnbc. Com and word from our sponsor. Welcome back to power lunch. Im michelle careera carusso. They are here at the rnc and it is just another example or two examples of how Business News and politics increasingly mesh. And events like this and the Trump Campaign can create strange bed fellows and speaking of that, tonight well have the great irony of little marco and ry ry ryan ted take the podium. And i cant remember the moniker how they dismissed him. I cant remember. That was jeb. But anyway, the ironies of it all are just so delicious. We will be watching. Make sure you tune in tonight, 2 00 p. M. Eastern. We have a live special from the Republican National convention. Youll be able to watch indiana governor mike pence. When does pence speak, by wait, do you know . We expect a little after 10 00. So you will see it on cnbc. Yes. Thanks, michelle. Closing bell starts now. Hi, everybody. Welcome to the closing bell. Im kelly evans at the Republican National convention in cleveland. Im Bill Griffith here at the new york stock exchange. That means i get all of the Peanut Butter m ms today. But i discovered mr. Goodbar. Ive been missing out 31 years now. Amazing. There is a movie in there, somewhere. Besides that, what are you finding in cleveland . You know, bill, i got to say that the lack of protesting is probably the most interesting thing thats going on right now