Transcripts For CNBC Power Lunch 20161005

And welcome to power lunch. Stocks are holding into the green. We have the dow up 122 points. S p is up by about 11 right now. But take a look at the tenyear note, because the yield is 1. 72 , a rising dollar, rising yield continue to be themes in todays mark. Were seeing nice gains in financials. And Energy Stocks among the biggest winners on that index at this hour. Take a look at chesapeake, trance ocean, marathon oil, free port mcmoran in the green right now. Im michelle carusocabrera. Americas trade deficit widening in august as we imported more goods than we exported. Mortgage applications climbing 3 last week and that was driven mainly by refis. Justice Department Says they have arrested an nsa contractor accused of stealing classified materials. Well have much more on that story in just minutes during our live interview with the assistant attorney general john carlin coming up here on power lunch. In the meantime, were counting you down to the big september jobs report on friday. Investors looking over mixed data today. The adp numbers were weaker. Ism nonmanufacturing data beat expectations. Steve liesman is here to break down the numbers for us. Steve. Michelle, strong data, but hawkish fed comments. Lets go through it all. Ism Services Surging past expectations, 57. Youll remember, it is important to remember, back in august, the lackluster performance of the Service Index and the manufacturing indices from ism both spooked the market into thinking maybe the economy had hit a wall. Looks like it hit a bit of data aberration there. Factory orders beating expectations. Adp payrolls softer, the trade deficit mentioned so eloquently by michelle, a bit higher than expected. Ultimately no change at all. Here is the expectations for friday. 170 on the number. A bit stronger than the prior one, expectation up from 151,000. No change expected in the unemployment rate. And average hourly wages expected to be up two ticks from one pick in the prior month. Fed talk, loretta mideaester sa the data is compelling. Jeffrey lacquer says he would have dissented if he had the vote because Interest Rates need to rise to ward off inflation. And then we have this from charlie evans, a dove, who says i have a forecast where things continue to improve. I do think there will be a rate increase. He went on to say in a speech in new zealand, i have he said that, the speech, he would be fine with a december rate hike if the data supported it. Speaking of loretta as i just was, she will be on squawk box on friday after the jobs number at 8 30 a. M. Focus on the short end of the curve. Talking a lot this week about the long end of the curve. Tenyear yield, 1. 72, back above this range. People wondering be still my beating heart at 172. Go on. But the question is, is this the breakout and there is a lot of people who think the viewpoint of the ecb and the Japanese Central bank have changed so much that the long end of the curve is going to start to rise even as we focus on what the u. S. Is doing. What do you make of all that. A lot of people said a lot of things about the once in a lifetime generational low in the bond market. And we have been predicting higher rates for a very long time. To me, if growth doesnt break out of the 2 gdp numbers, if inflation remains 16, 17 and Central Banks remain accommodative, i dont see very much upside on the long end. We did see a pop today. Worth taking a look at the twoyear today. A nice pop from the data today. Up to 85 basis points. And you did reach i dont know how to talk about it when a negative number gets to be positive, a high at zero. You know what else is interesting . I dont have a strong view that rates will rise tremendously from the current i know you had jeff gunlock on fast money, hes known as a bond guy. What is fascinating to me is so many of these bond people, theyre not talking about bonds hardly, theyre talking about stocks. Bill gross talking about buying linkedin, microsoft, sab miller, the bond market is so uneventful these days that the biggest bond players dont seem interested. Not uneventful. It is perceived as over valued. We had muhammad havalarian and said bonds and he said cash. Many people missed a powerful move. I wish them well and some of them are also sitting on great big piles of gold or perhaps cans of tuna in their bunker. Im not mocking you. Im saying there has been a negative tinge to the commentary out there. It is possible we break out of these numbers. 2 becomes a floor here. Got it. Thank you, steve. The Vice President ial candidates squaring off last night at Longwood University in farmville, virginia. The debate was more aggressive than many expected with sharp exchanges like this one on trumps taxes. We have a tax code, senator, that actually is designed to encourage entrepreneurship. Why wont he release his tax return . Were answering the question about the business thing. I do want to come back to that. His tax returns, that showed he went through a very difficult time but he used the tax code just the way it is supposed to be used and did it brilliantly. How do you know that . You havent seen his tax retu returns. Hes created a business worth billions of dollars. How do you know that . Were counting down to the second president ial debate, at Washington University in st. Louis, missouri. Joining us are christina belintony, at the l. A. Times and cnbcs washington correspondent john harwood. Not sure were jockying the music but maybe because youre usually on squawk box. Does it matter, do we care, no offense to either guy, who wins a vp debate . I dont think it matters very much because i do think that mike pence managed to calm republican nerves last night. They needed the bad news to stop after Donald Trumps poor performance in the debate, the subsequent erosion in the polls and some of the behavior that he engaged in in terms ofalicia machado argument. They wanted an error free performance and pretty much got it from mike pence. He was kconservative, reassurin, avuncular, had a very pleasant demeanor on camera. I think that served donald trump well. Tim kaine on the other hand was very well informed and very aggressive, but he was also a little bit undisciplined in the frequency of his interruptions and the way in which he came across. He didnt entirely look comfortable doing it and im not sure he made viewers feel comfortable either. What was your take away from the vp debate . Did it matter . Well, no, they generally tend to not matter. John is exactly right, that a lot of republicans breathed some sighs of relief, but johns own reporting has maybe donald trump as not all that thrilled that his running mate may have overshadowed him. For me what was really an interesting take is that we didnt learn that much about these two running mates. Many of these previous Vice President ial debates you heard more about their own records and there is a lot there. Kaines record both as governor and as senator, one thing that didnt come up has been his push to authorize military force against isis in congress. And thats an area where he actually has been conflicting with president obama and they didnt talk about that. Some of pences records as governor didnt come up. So for me that was interesting because it was all about the people at the top of the ticket. And when you watch the debate, you know, youre covering this so you watch it a couple of times by the end of the night, and then reading the transcript is a very different experience because you realize how infrequently pence actually defended donald trump or how infrequently pence really talked about what donald trump would do for the country and how repetitive kaine was in that aggression, just hitting, you know, on three, four, big topics, like the clintons big pushes. And that all showed up in ads this morning. What do you make of the talk, this is an audition to run for president for pence, that kind of thing. Of course. And this is something hes always had higher ambitions, and he is somebody that social conservatives have always liked and now hes appealing to a Broader Group of republicans. Should donald trump lose on november 8th, people will look to pence and he presented himself as disciplined and professional politician, he sort of looked the part. One of the reasons he was fairly smooth last night is because he was a talk radio host for a while. This is someone who knows the command of the medium. And actually has a record he can talk about and skill set certainly showed. Thank you, lady and gentleman. Lets bring in joel fishburn covering the software and Cloud Technology space. Joel, great to have you with us. This is a company that is not new to the acquisition game. It made a couple of big acquisitions in the past few months or so. How come you dont get this one . Marc benioff is in love with twitter according to chris soccer. What are we missing here . As you said, marc benioff has built the best Cloud Company in the world. This is not a good fit from our perspecti perspective. Twitter is a consumer ad driven business and consumer ad spending is decelerating and usage is decelerating. And this is a bet the farm acquisition by marc benioff betting half the company to buy something that we dont think fits with the longterm strategy. And while hes been well in the acquisition hes done to date, this one is a stretch at best case. And a lot of shareholders wish he would focus on the core business at this point. Joel, in terms of shareholder acquisition, the market is conveying the notion that it hates the potential on this deal at this point. Do you anticipate there could be some large shareholders, some large vocal shareholders, he will agitate against such a tieup . Absolutely. And were all meeting with marc today at 3 30 in San Francisco at the dream force conference. I think hes going to hear from a lot of shareholders that their disfavor of them, thinking about doing a twitter deal, and i think that in the event that they do one that sales force shareholders will flee en masse and there is a significant risk to downside a lot of downside in the stock. Further downside from here potentially. Joel, thank you. Appreciate it. Thank you. Joel fishbein. More on the big arrest Just Announced by the Justice Department. A former nsa contractor accused of stealing government secrets. The u. S. Assistant attorney general john carlin joins us ahead. And as we head out, can you name todays mystery chart . Here it is. This is the hint. An etf. A huge sign of the times. The answer when power lunch returns. Rsuit of healthier. It begins from the second were born. Because, healthier doesnt happen all by itself. It needs to be earned every day. Using wellness to keep away illness. And believing a single life can be made better by millions of others. As a Health Services and Innovation Company optum powers modern healthcare by connecting every part of it. So while the world keeps searching for healthier were here to make healthier happen. Whyour boss . Ork for . Yourself . Your family . Our Financial Advisors are free to realize a plan to fit your familys unique needs. Well listen. Well talk. Well plan. Baird. And im just a guy who wantsants to sell him that truck. Ck. So i used truecar. It told me what other people in the area paid for the truck i want. And because were a truecar certified dealership, i already know the truck he wants. So were on the same page before he even gets here. Its fair. And its fast. Look good . Looks great. This is how car buying was always meant to be. This is truecar. Welcome back. Big news breaking in the past few minutes from the cnbc cybersummit in partnership with mit and aspen institute. The Justice Department announcing a former nsa contractor has been arrested. Hes accused of stealing classified materials. Lets get to cnbcs own Andrew Ross Sorkin live at the summit with the man who broke the news. Andrew . Thank you, brian. Im here with john carlin, assistant attorney general for National Security. We were on stage together when the news from the New York Times and their press release with their name on it right here crossed the wire as well. Is this a second instance of an Edward Snowden . Im going to be confined to what we have charged and what we charged here is that back on august 29th we charged an individual with theft of government secrets, including classified information and we take that type of conduct very, very seriously. These are allegations. I think it is reflected in the charges. How significant in terms of what this information that was stolen do we know what happened to it . Has it been given to foreign actors, foreign countrys . So according to the complaint what hes been charged with is taking the information and bringing it home. We dont address any other issue. I think in the days and weeks to come youll see continued investigation and then through the Court Process maybe additional details. This was sealed on august 29th. What happened between now and then and why are you going public with this information . So im not going to discuss what occurred when it was under a Court Ceiling order. Ill say more generally it is quite common in cases particularly National Security cases that charges remain sealed for a period of time while you do ongoing investigation. In this particular instance it looks like this individual stole code, took code home, it sounds like. Any is there any chance that this code was taken without nefarious purposes, if you will . This according to the allegations in our complaint, this was done intentionally. And when youre a government employee, you swear an oath to protect information knowing the damage that the disclosure of sensitive sources and methods can do to our ability to protect ourself against all sorts of foreign threats. So we take this type of case very seriously. That said, im not going to comment outside the complaint on this particular individual of charges because thats why we have a Justice System and a right to defend himself in the court of law. Given this was a sealed case, the public did not know about it, are there other instances we dont know about that you can shed light on . Well, andrew, if there are sealed cases, then, no. There wouldnt be other instances that we could shed light on. Ill just say more generally, though, that for businesses who are watching today, the threat of insiders is real. And what can happen is you have amazing defenses to protect your intellectual property and other secrets from those who are trying to obtain them from outside your companys walls. But you forget sometimes to have a program where you watch those who you trust and those, the abuse of that trust is one of the most serious threats a company how quickly did you catch this . Meaning how long was this going on before you knew about it . Im not going to address that. Are you satisfied with whatever systems are in place currently within the government both around employees and contractors dealing with sensitive information, lets put it in that context . I dont think we can ever be satisfied when it comes to the threat of those who try to steal sensitive information. So whether we successfully catch someone on the front end or not, we need to learn from each experience and figure how we can best protect this type of information that is needed to protect our public safety. We have a question from the studio. I believe michelle has a question. Thank you, andrew. This individual report indicates works for the same firm as Edward Snowden, booz allen, that stock is getting hit today. Are you taking a closer look at the contract or just mentioned the situation in terms of contractors in general. What about them in particular considering now two individuals related to the firm . Well, here at the Justice Department, were going to keep our focus on following the rules of the criminal court system and trying to hold accountable anyone who may have broken the law. Im sure that trusted professionals i work with across the community will take a hard look at anything they can learn from this case, whether about contractors or other issues to see whether they can better defend our systems from others who might try to steal from them. Do you find there are certain contractors that have better policies in place, or anybody working at the government has the exact same policies, structure, security in place . It really depends where you are in government in terms of what the policies and procedures might be with the contractor. There is a different set of rules for those who work with information that is classified or National Security information. But this risk, the risk posed by contractors, by those who are in your supply chain, when youre a company or those who you subcontract with or even your outside law firm, if youre a company, is real, and so i do think it is an important practice point for those of us in government, but also in the private sector that if youre trying to protect yourself, got to look more broadly than your own company to what those that you hire may have access to. Before we go, just on a separate issue, talking at the cybersecurity summit all day about the Public Private relationship when a company is supposed it go to the government. How a company should think about itself as a victim or not and one thing i mentioned was this yahoo case, and a lot of people initially said victim of hacking. But then in the days that came after, people questioned whether the security was enough. And it raises all sorts of questions about how public a company should go and creates almost a disincentive to go public and to come to you. What do you tell ceos about that . We got to create a culture where we move beyond blame the victim and one thing we tell ceos is on your own, it is very hard, particularly in this era of the blended threat, something looks criminal can turn out to have National Security consequences for you to make the right calculation unless you work together. Let me give you one example. We have a case, a real case where a Mainstream Company with a trusted brand suffered an intrusion of a relatively small amount of personally identifiable information and then was subjected to a 500 buck ransom attempt. The vast majority of companies would have tried to handle that on their own. In this case, the company did the right thing. It worked with government. And lucky they did because on the other end was actually a kosovo extremist who moved to malaysia, hacked into the company, stole these names and addresses, culled through them to look for government employees, and then provided them to a british born one of the most notorious cyberterrorists in the world who had moved to the heart of the Islamic State in syria, creating a kill list and on twitter was blasting the names back out saying kill these people by name and by address and only because that company worked closely with us that we were able to take effective action. That guy, thankfully, he was arrested in malaysia pursuant to our charges and is now sentenced to 20 years in prison. Together we can confront this threat. But if you try to handle it on your own, the consequences may be as serious as life and death. Chilling story. John carlin, thank you for the news. Thank you for your service. I know youre departing washington next friday. So thank you. Thank you, andrew. Thanks, guys. Back to you. Thank you very much. And lets check out booz allen hamilton, the publicly traded company who this contractor did work for and the stock moving during the interview moving counse down, down about 1 . Maybe look at other Consulting Companies that could benefit if booz allen loses business. One more look at todays mystery chart michelle brought you before the break. Etf, big sign of the times, i mean right now. This is the pure funds cybersecurity etf. Ticker is hack. What else . That is up 20 in the past six months. And some of the biggest etf components are also up big in that time frame. Semantic, qualys, infoblox. Up next, the latest on hurricane matthew. Youre looking at evacuations under way right now as that storm approaches. We have the latest when power lunch returns. Ng them to handle the recent popularity boom in fanny packs. Its pretty fly. Unless being 90s is your thing. Well, cdw and hpe services gave them the flexibility they needed to scale up their scale up their cloud resources, making sure supply meets demand. Poser [ classic ringtone ] whats crackalackin . Hey, did you remember to set the vcr . Increased flexibiilty by hpe services. I. T. Orchestration by cdw. Now that fedex has helped us we could focus on bigger issues, like our passive aggressive environment. Were not passive aggressive. Hey, hey, hey, there are no bad suggestions here. No matter how lame they are. Well said, ann. Ive always admired how you just say whats in your head, without thinking. Very brave. Good point ted. Youre living proof that looks arent everything. Thank you. Welcome. So, fedex helped simplify our ecommerce business and this is not a passive aggressive environment. I just wanted to say, you guys are doing a great job. Whats that supposed to mean . Fedex. Helping Small Business simplify ecommerce. But they demand the best shopping experiences. They may want the latest products and services, theyre your customers. And by blending physical with digital, cognizant is helping 8 of the 10 largest u. S. Retailers meet their demands with more responsive retail models. Ones that transcend channels and locations, anticipate expectations. Creating new ways to engage at every imaginable touchpoint. Its a new day in retail, and together, were building the store of the future. Digital works for retail. Lets talk about how digital works for your business. Hello, everybody. Im sue herera. Here is your cnbc news update at this hour. Hurricane matthew continuing its trek towards the east coast. Matthew bearing down on the bahamas and expected to be near floridas coast by thursday evening. It is packing sustained winds of 115 miles per hour. President obama was briefed on the storm. I want to emphasize to the public this say serious storm because it is not going to be hitting enough land, it is going to be building strength on its way to florida. Smoke from a passenger samsung cell phone prompted an evacuation of a Southwest Airlines flight out of louisville, kentucky. None of the 75 people on board were injured. But there was minor damage to the planes carpet where the device was dropped. Israel says it is carrying out air strikes on the gaza strip after a rocket fired from the area landed in a southern israeli town. Plumz plumes of no s of smoke rising air. Mall of america, the nations largest shopping mall, will be closed on thanksgiving. The mall has been open on the holiday since 2012, but now theyre telling the ap that it wants its workers to spend time with their families. Good for them. Thats the cnbc news update at this hour. Back to you guys. Thank you very much, sue. Lets check on where we stand in the markets. We still got green arrows pretty much across the board. Dow up 110. Nasdaq higher by 34. Look at the strength in financials. Were seeing that strength in the back of the tenyear yield today, hitting highs we havent seen since september 21st. S p bank index up by 2. 25 . Wells fargo outperforming the peers today. Thats a change in story for wells fargo. Higher by 2. 4 . Major story breaking in the past hour from the cnbc cybersummit. The Justice Department announcing an nsa contractor arrested, accused of stealing classified materials. Tyler mathisen is at the summit in cambridge. Im here with one of the individuals at the New York Times who broke the story, david sanger, chief National Security correspondent for the times. Lets get right to the matter, some of which mr. Carlin addressed, some of which he chose not to address. What did this guy, Harold Thomas martin, take . Well, from the best we can take right now we can understand right now, it was different than the snowden probe. Mr. Snowden took big power point slides describing classified operations of getting in breaking into china or the mass collection of metadata from phone calls to the United States. It looks like mr. Martins trove is mostly source code. The computer code used by the nsa to break in foreign Computer Systems, put in what are called implants. We saw a little bit of this, were not sure if it came from mr. Martins trove, in august, when some of this was posted by a group that was trying to put it up for auction. Some of the source code. Some of the source code. And the code you should think of as sort of a tool kit. If you were working at the nsa, particularly in their tailored access Operations Unit and had to figure out how you were going to break into a Computer System in iran or in russia or in china. Mr. Carlin declined to answer andrews question about what this individual may have done with the source code. But or even that it was source code that was taken. But what you just said suggests to me that either for profit or to do damage to the United States he passed it along to someone. We dont know yet and the indictment does not say. We do know that they found a fair bit of it in the house in glen burny, maryland, but we dont know for a fact that it was actually passed on to anybody else. You covered snowden. You are covering this. Which one potentially is more damaging . Can you make that kind of judgment at this point . Little hard to do it right now because we dont know the answer to your last question, how much of it was passed along. But one way to think about it was the snowden trove was damaging because it revealed operations including against our allies, had to spend a lot of time explaining. It was embarrassing. It was embarrassing and it hurt a lot of alliances and exposed a lot of operations against including adversary countries. This is more useful to a country like russia or china or iran or some other that might be suffering from maybe the target of an attack. But that doesnt necessarily mean that it is going to have the political charge around it. And not at all clear that mr. Martin had the political agenda that Edward Snowden did. The complaint says mr. Martin admitted he took this information. How long was this investigation going on . Well, it is a good question. We think that the removal of the material may predate the snowden era. The stuff he took. He was taking before snowden. Could well be or we had some sources indicate that. On the other hand, he was not arrested until august around the time that this set of code went up by a group that called itself the shadow brokers. Still trying to figure out what the relationship was, if any, between the information he obtained and what shadow brokers posted. David sanger, thank you very much. Well be with you later this afternoon at cambridge cybersummit where youll be moderating a panel. We appreciate your time now and then. Folks, back to you. Thank you. European banks very much in focus this week, this month, amid the uncertainty about the future of Deutsche Bank. David sarris joins us now. Good to have you here. Hi, michelle, thank you. Before we get to Deutsche Bank, what do you make of the creep up in yields . Dont want to make too much of it, but in the United States, for example, the tenyear yield is at 1. 72 . Is this the beginning of something big, big breakout, or do you think it will be trapped in the reins we have seen for so long now . I dont think it is the main breakout. I think yield curve will steepen. We have seen the boj starting basically to buy less on the long end, targeting yield curve steepening. I think well start buying less on the long end, the reason is, remember, the tenyear yield basically matters to investor, savers, they need some yield. Central banks understanding there are unintended consequences over Monetary Policy and quantitative easing but could do more harm than good. As the result, people will focus more on fiscal policy going forward. So we actually thinking globally youll see steepening of the yield curve. Boj, bank of england for sure, you probably see the ecb from march next year. And in the states too. Seen the most Economic Data within the fed is behind the curve. Data been very, very strong and the 25 dip rate hike i think was a really warranted in september. Any prediction on where you think the tenyear note could go at this point . We think if i say the german bund should be in the range of 30 to 40 basis point, the basically in japan, should be about 20. In states, we think they should be around 2. 1, 2. 2. Were showing the bund now, negative, that would be a very, very big move. This would be incredibly good news for financials, wouldnt it . Yes. Financials basically, if you think about it, been hit in one in 150 years storm. Basically having flat yield curve in negative yields equals to industrials having negative margins by law. So no matter what they do, they cant make any money. And i think eventually yield curve will steepen and that will be very, very bullish for financials. We see today action on u. S. Financials and that will basically pass across global financials in general. So based on your notion, this is melissa, by the way, that rate will rise steeply, what is the one trade that would have the most leverage in your view to that premise . Would it be long financials like crazy or other ways how youre thinking about this particular trade . Having ten year in germany going from minus ten to plus 40 is not steepening like crazy. Long end rates over the last 20, 30 years have been in the range of 2 to 3 . Being at the 20 or 30 business point positive is not crazy. It is just slowly feels like it in this im saying in terms of i didnt mean the move in your predicted move in the yield curve seems like it is steepening like crazy, is the are the financials the one trade that is most levered, would you be buying financials like crazy. In other words, when would you be most overweight with the notion that the yield curve is steepening . I think there are two trades, first one is to add to equity exposure for the very well strong capitalized banks. They have a positively geared to rising rates. Beneath the deposits, well capitalized and stronger economy. In europe, you can names like bank santander, the french, you have ing, you can have banking in italy there. The second, which is the smartest way of deploying capital and financials is to buy hybrid capital so it will be called u. S. Convertible in europe. It is the mezzanine piece that is yielding today, 7 , 8 . It is fixed term notes on 40 year view and then go would you touch Deutsche Bank . Deutsche bank, on friday, thanks to capital of head lpsli in states, friday, we could buy debt yielding 15 with two year maturity hybrid that. So you bought it . We bought it. We need the capital to shake the markets and to be able to deploy capital. 15 is extremely attractive. For us, it is a 2 , 3 exposure. Not crazy about it. But certainly 15 is thank you for joining us. Thank you. Thank you, michelle. Coming up, the man that vanity fair says may be the most respected man in Silicon Valley except he does not live in Silicon Valley. Plus, the list of the Worlds Best Brands is out. Good news for a few big tech names you know and maybe some very bad news for one big blue. Hey gary, what are you doing . Oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. Make sure its ano make a intelligent one. The highly advanced audi a4, with available virtual cockpit. To give you an idea of how powerful players are, the social networks alone on this list are more valuable than the gdp of over 95 of countries around the world. John kelly joins us from new york. John, great to have you with us. Thank you for having me. What were the most surprising changes on the list . We had a disrupters list that represented Silicon Valley and powers that be list that represented what was going on in new york and the media industry. We realized everyone is actually in the same business. All really in the business of attracting our attention, whether thats on their own mobile or web platform, whether thats in a car or massive distribution network. I think one of the things we look forward to is we compile the list in years forward is which of these Companies Realize they have to work with one another, which are trying to go to which new businesses do they begin to compete with one another in. What i noticed, tim cook last year was within the top ten, i think number four, and now at 11. What does that tell you about apple and apples place in our life compared to last year . Apple certainly still the worlds most valuable company. It finds itself in the position where some 60 of the revenue comes from the smartphone. We know that smartphone growth is not going to accelerate at the same speed it has in the last half decade. The iphone has been the most successful and influential product of an entire generation. It is very hard to replicate that and i dont think it is any flaw of his own that theyre seeing the end of that long tail now. It seemed like it was a natural progression. Especially since there was so Much Movement toward the top, you know, snapchat in particular now. May not pose a head on head threat to facebook, but does seem to disrupt the way that people under 25 are getting their news and information. And now that ride sharing is clearly the sort of battleground, not just within asia, but also in the United States, it seemed like there were other worthy competitors that deserved to be in the top ten. You put the Washington Post executive editor on there as well. You look at the Washington Post, ive been very impressed with what they have done, especially on the digital side. To me, theyre becoming more of a National Paper than the New York Times is. How good of a job is the Washington Post doing right now . How relevant have they become nationally . We like to think of it as the paper of metrics. It is not just a National Paper and, remember, you know, about five years ago, they were trying to retrench it in the latter stages of the it has gone international. From a product perspective, i say this as somebody who used to work at the times, as a product perspective, the Washington Post is extraordinary. It does lead when it comes to showing us what multimedia journalism and storytelling is going to be like in the next five years or so. I remember when you used to have to put in your zip code to read the Washington Post story. Remember how antiquated . Who would do that . Want to get there as fast as possible. It changed fast, very fast. Im looking at the financial names under the new establishment 2016, ken griffin, jamie diamond, carl icahn. None of them seem very new. I dont want to call them old, but establishment establishment. A rough year for hedge funds. Thats why you see griffin and not a whole lot of peers up there. One thing you also see reflected in this list is just the assent of private capital in the markets. Thats why you see a number of venture capitalists in the top 20, you know in front of a number of the guys youre highlighting there now. Got it. John, well leave it there. John kelly, vanity fair. Amazons dominance putting jeff bezos within sight of title of the worlds richest man. But, hey, jeff, dont rest on your laurels just yet. There is a certain social media billionaire right on your heels. Robert frank has the numbers. We had bill gates and Warren Buffett for years another list with gates and buffett. But the next race could, i think, be between jeff bezos and mark zuckerberg. Gates now worth 89 billion. Look at the current top ten, top five. Ortega of spain at 79 billion, bezos at 72 and zucker burr at 56. What stock price would it take for jeff and mark to reach the top . Amazon would need to top 1200, so 45 gain from todays price for bezos to top gates 89 billion. Thats kind of possible, actually. Reasonable to think about that given the stock runup just recently. As for mark zuckerberg, he would need facebook shares to jump even more from 128 today to more than 204 for him to take the top spot. But, again, you know, you think about these two guys what they have done in the past five years, it is pretty conceivable that these two guys will be the next gates and buffett. Talking about for year after year. Amazon already, price target on the street for 12 months over a thousand dollars. 1204 seems to be within that range. Gates is giving away a lot of his money and buffett is getting up there in age. Hes committed to giving away all of his money. Thats what made life so boring. For those who put together the best it would be nice to see someone else at the top. Someone else gets a chance to be number one. Does ortega do interviews . Zw i tried many times . If michelle cant get it, it is not possible. Thats cute to say, but no. We interviewed people in his company. If youre watching, we would love to make you number one. What happened to carlos slim . He was always the price of the american automobile has fallen. They regulated. Six hotels on baltic. Yes, exactly. Thank you, guys. One analyst made a very big price target move you need to hear about. The latest analyst calls powers your portfolio. The infamous traitor. And i know ahing or two about trading. So i trade with e trade, where true traders trade on a trademarked trade platform that has all the. Get off the computer traitor i wont. cannon sound mobility is very important to me. Thats why i use e trade mobile. Its on all my mobile devices, so it suits my mobile lifestyle and it keeps my investments fully mobile. Even when im on the move. Sign up at etrade. Com and get up to six hundred dollars. Time for street talk, stocks you need to know about. We kick can off with Credit Suisse cutting on dollar tree, dollar general. Conventional grocery will likely further accelerate promotions. We heard about tough times in the grocery business. Dollar tree at underperform rating, 69 price target. Dollar genuity rawl witheral ne 70 target. Parker hannifan, buy from a hold. A survey of distributors that says based on the results he believes revenue likely to come in ahead of expectations. Also raising estimates, thinks all of this should help investors get comfortable with the idea that the worst is behind ph. Boost the target to 141, about 13 upside. Next up, amazon, talking about amazon, another price target raise. Morgan stanley raising it to 950 from 800, setting prime subscription growth as the major driver near term. Morgan stanley sees prime subs of 60 million. Jpmorgan, rbc, ever corps, all raised their price targets to a thousand plus dollars a share. Hike is a sanguine call. It is. We only see 20 . 950 only. The final stock as always, sort of smaller cap under the radar name, intelia, 600 million market cap biotech. Jeffries hosted management, very positive. The dinner had to do with a major lawsuit to Companies Involved and i read the loss, it is way way out of my head. The point is, analysts reiterating a positive on the company, says the whole thing, lawsuit, everything, multiyear process. Here is what you care about. A 33 target on ntla. Basically a double on the stock. I avoid these. Too wild. Four analysts cover the name. Their average price target is 34. 50. We have been watching the stock tick higher as we have been talking about it in street talk. Bullish call from jeffries, based on a lawsuit. A lot of stuff here, complicated story. Stock moving a little bit. Coming up, more on the shocking news that broke in the past hour. Former nsa contractor arrested. Look at shares of booz allen, down by 2. 25 . That is the firm the person worked for. The latest ahead on power lunch. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive im melissa lee. Heres whats on the power lunch menu. Jim cramer has a big exclusive with a ceo of sales force. Com, marc benioff. Is he making a run for twitter . Major breaking news in the past hour. More classified materials stolen from the nsa. Were all over that story. And theyre the most valuable brands in the world. Are they in your portfolio . The second hour of power lunch begins right now. A check on the markets with two hours to go until the closing bell. Stocks higher for the first time in three days. The dow is up triple digits. S p 500 fresh session highs. Crude oil at threemonth highs, pushing closer to 15 buck er tr barrel. Thats fueling the Energy Stocks, best performing sector at this hour. Big moves in bonds. The yield and the tenyear note getting 1. 72. This day and age, thats a big move. About a twoweek high. Brian . Music making me feel like im on a bad german river cruise. Headlines this hour, the Supreme Court may issue a ruling to make it easier for prosecutors to go after Insider Trading charges against Hedge Fund Managers and traders. Calling for samsung to pay a 27 billion special dividend. And apartment rents falling in big markets including San Francisco and new york. Big news that broke in the past hour. Former nsa contractor arrested and accused of stealing classified computer codes. Eamon javers joins us with more. Hi, melissa. Live at the cambridge cybersummit in cambridge, massachusetts. Put on by cnbc, mit and the aspen institute. We had access to top level Law Enforcement and Intelligence Agency officials even as the story was broken by the New York Times earlier this afternoon. John carlin is the assistant attorney general for National Security and Andrew Ross Sorkin had a chance to ask him about this story, the arrest of an nsa contractor in august, unsealed and made public today. Carlin said he was limited ultimately to the four corners of the document that the department of justice put out. Here is what he had to say about it a few moments ago. Ill be confined to what we have charged and what we have charged here is that back on august 29th we charged an individual with theft of government secrets. And we take that type of conduct very, very seriously. These are allegations. But i think it is reflected in the charges. What was stolen here is one of the big mysteries in the story so far. Tyler mathisen had a chance to sit down with david sanger, the reporter at the New York Times who broke the story today in the times. Sanger gave us more of an indication of what sensitive intelligence documents may have been stolen here allegedly by this nsa contractor. Here is what he said earlier today. Looks like mr. Martins trove is source code, the computer code used by the nsa to break into foreign Computer Systems, put in what are called implants that enable them to do surveillance, to do cyberattacks, and so forth. I had a chance to talk to officials, fbi officials and others who are here the. There is more to be learned about this story. Whether or not this is a second Edward Snowden situation. The contractor worked at the same firm. Is this at a par with that or is this something less significant than were looking at. Reporters and others will be sorting through this for the next coming days to try to figure out what was stolen here and just how significant it might be for u. S. National security. Eamon, when there is a physical intrugs intrusion into the nsa, im sure there are protocols enacted to prevent from others. How does that change and is there a sense as to whether or not it can be limited at this point . Well, look, this is what is called the insider threat. This is what intelligence agencies worry about. Not necessarily somebody breaking in from the outside, but somebody already a trusted person on the inside walking off with documents. What we know in this case is that the fbi went to this contractors home, searched his vehicle his person, himself, his sheds, his house and said they found at least six documents but potentially maybe more than that of illicit National Security information not supposed to be on his property at his house. So clearly the systems that are in place were not sufficient in this case because this was somebody who wasnt supposed to bring this stuff home. Thats what hes being charged with. One of the other big mysteries is why did he bring that home, what was this all about . Was this somebody who wanted to leak to wikileaks, wanted to expose something and was a whistleblower. Somebody conten plating working with foreign intelligence, or some other situation yet to be determined. A lot here still needs to be sifted through. It feels very different than a second snowden. Im reading through the complaint. They go to his house, they find actual physical documents but it doesnt feel we get no indication thus far that it has got the same kind of political motivation that Edward Snowden claims that he has. You might sense this is somebody who wanted to sell it for profit or sell it to a foreign Intelligence Agency for ideological reasons. Not necessarily a leaker who wanted to broadcast this widely. But we dont know that. We have to wait and see what was the motivation of this person, why did he do this . This wasnt just sloppy security procedures where he kept some stuff at home and stuff at the office and it was just a big mistake. The sense you get in talking to Law Enforcement and intelligence officials here today is this was somebody who did this on purpose. Why, though, is going to be a big question. You wonder, you look at Edward Snowden, i understand the comparisons, he put everything on hard drives and traveled around and talked to reporters. This seems a little more christopher boycelike. Basically Somebody Just takes stuff and hides it with maybe the intent to sell it. Does this look like more i hate to use the term good oldfashioned espionage, some broader purpose . We have seen u. S. Law enforcement and intelligence agencies penetrated in the past by insiders, trusted people, usually when americans flip, it is predominantly for money. Get agents who sell they want a new beamer, they want cash for their mother, a beach house, Something Like that. You get people who sell information to the russians, chinese and others for money but there is an ego motive wrapped up in this. That can be a motivation, again, they have to look at all of that. Eamon, thank you. Eamon javers. A statement coming in from booz allen hamilton. When booz allen learned of the arrest of one of its employees by the fbi, we immediately reached out to the authorities to offer our total cooperation in their investigation and we fired the employee. We continue to cooperate fully with the government on its investigation into this very serious matter. Booz allen stock is falling as it is. Down 3 . You need to look at companies that booz allen does a lot. They employed snowden and this guy. If there is a rick of future contracts, some names that would not overlap would be caci, csra and agility, im going through a list. Those are a few names that might benefit if booz allen does lose government business. Now to the broader markets. Nice rally today. Bob pisani on the floor. There are some winners and losers. Youre going to be surprised at some of the winners. When is the last time you heard of 52 week highs in oil stocks. Oil stocks are suddenly hot, hot, hot. We have new highs, for example, eoj, two smaller expiration companies, when is the last time you heard about bank stocks hitting a52 week high. Here is the second group given up for dead. Coming back, new highs, comerica sun trust regions, and zions bank. What is losing today . Once again, this is real trend now, Interest Rate sensitive, utilities, telecom, the big winners in the first half of the year and last month or so, they have been losers down again today. Thank you very much, bob. Talk more about what bob was talking about, energy and fnz, be financial financials. The sector is overweight. So youre long financials. Are you so excited to see the ten year yield at 1. 72 . Are you going to put on your party hat . Im not sure im excited. There was enough oomph in the economy, not tremendous amount of strength, but enough, people got nervous on the august ism numbers and we have seen a bounceback. That was consistent with a lot of other work we were doing. Looking at Capital Spending numbers for 730 companies that we track. They werent slowing down. We thought that we would see some of reversion back to the trend. Does your position in financials, is that contingent on the yield curve steepening even more . Where does it play . One is within banks and diversed financials, the work we do suggests the stocks go higher. You could have deep cyclicals that trade higher. Energy would be an example. Thats the second piece of it. Third one has to do with improvement in earnings momentum. Theyre trying to turn up a little bit. Energy is about oil prices. Our firm view, low 60s by next year, stock prices more up side. Especially when we look at the valuation, the drilling companies, probably the most attractive. Havent talked about our dividend stocks. Where does that fall in the portfolio. Does that put a cap on those trades . So part of this is money flow. Almost nothing to do with the their position, portfolio, probably. We have been underweight. But an example, for years, reits traded as if they were, like, connected with dividends. With the Interest Rate. So Interest Rates went up, reits went up as well. Which is the exact opposite of what we have been seeing the last two or three years. That is the money flows going into etfs and less about the underlying fundamentals of the business. If the economy is improving, if inflation is going on, youre going to raise rent. Think of it that way. And most of that will hit the bottom line. You must pay out 90 of that to dividend, otherwise youre not going to lose doesnt that happen with a lost things. A lot of norms and models and conventional wisdom seems like you could just throw them on the ash heap of history. If you go back and back test which, a lot of people dont do, they make the assumptions. Reits started changing the way they traded three years ago. The only sector that had that difference versus the past in terms of its Interest Rate sensitivity. Thats what im saying this is about money flow. When yield goes down, people say lets rush in. It is more about tracking how the performance works, less about me trying to impose my view. Im convinced i cant tell millions of investors what to do. Bottom line, you like reits here . No, were not they left financials, but within financials, banks, diversify financials, not that excited about insurance. And then energy, like the energy in general, drillers look probably some of the best on valuation. One last piece. We surveyed our clients. They dont like the dividend yield paying stocks anymore. They turned. This was a survey. I dont know why people necessarily do what they do. I can tell you what the general view was, they liked energy and industrials and financials, it, and then they didnt like paying stocks. Real change from what we have seen the last few quarters. Thanks so much. My pleasure. A big intraday move in bond yields. Rick santelli tracking the action. If youre a junkie for the fix eed income markets, this ha been your week. One thing is interesting, there arent a lot of implications for the yield curve. That could speak volumes. What do i mean . Twos are up three, 30s are up three. Parallel shift in the yield curve. If you look at two year and five year, leading the comp contest. Both are pricing yields should they close here at the highest yield close since the first couple of trading days of june of this year. One week of tens tell you pretty much everything you need to know. Continues to drift. Keep this in mind, since july 1st, we had two closing yields 17 handle. This is a big deal. And if we look at foreign exchange, first of all, keep in mind, that the yen being down and the euro being up is pretty much neutralized the dollar index, but if you look at one week of the pound dollar and one week of the euro, pound versus the euro, you see the drift is there. 21 year low on dollar side for the pound, fiveyear on the euro side this is significant considering brexit negotiations yet to come. Alls your. Thank you, rick. Just crossing from dow jones here, mexicos jose cueva, going to do an ipo, however, the now reporting theyre going to lay the ipo until after the u. S. Election given the expected market volatility around the vote. So mexicos jose cuervo delaying a vote. I wonder why. We had the results from Constellation Brands and cited the strong growth in the spirits business. One would think there was a small window, perhaps getting smaller, by which a company like this could have gone public and had a decent reception. Being from mexico is perhaps the problematic part. Thompson reuters has the exclusive. Still ahead, jim cramer joins us with a big exclusive with sales forces Ceo Marc Benioff. Is he going to buy twitter . More on this breaking news story, a nsa contractor has been arrested. Booz allen, right now, down by 5 , getting worse as the session grinds on. Power lunch back in two. My hygienist said the most random thing. She said i should think of my teeth like an apple. It could be great on the outside not so great on the inside. Her advice . Use a toothpaste and mouthwash that strengthens both. Go pro with crest prohealth advanced. Its uniquely formulated with Activestrength Technology to strengthen teeth inside and is better at strengthening the outside than colgate total. Crest toothpaste and mouthwash makes my whole mouth feel amazing. Advance to healthier gums and stronger teeth from day one. My checkup was great. Crest. Healthy, beautiful smiles for life. Developing news in the past who ur fr hour from the cnbc cybersummit. A former nsa contractor arrested accused of stealing classified materials. Why are we showing you this chart . He worked for booz allen. That stock is down big. This guy worked for booz allen. So did Edward Snowden. Joining us is stewart baker. Good to have you here. What do you make of this arrest of a guy named Thomas Martin from maryland . So, michelle, we dont know a lot. We know he took a lot of stuff home. And he had it at home when the fbi raided him. Thats not good. He should never have done that. And it raises questions about the security that was imposed on him at his workplace. We dont know that hes a leaker. We dont know hes working for a foreign government. All we know is he took a lot of classified material home. Stewart, you worked at the nsa. Can you fill up your brief case and walk out the door . Seems odd to think that a contractor not even a full Time Employee at nsa can walk out with materials that are then found to be classified materials. It is not something that should have happened, but, you know, thumb drives are tiny. They dont do patdowns of employees as they walk in and out of the building. Especially if he gathered this before snowdens leaks, it would have been easy for him to carry it out. This has been happening for decades. Every five or ten years we have a big espionage case. Why do 5. 1 million americans have high or top secret security clearance, 1. 9 million have the highest level. What did ben franklin say, three people can keep a secret if two are dead. How is it possible that 5 million americans have high or top secret security clearance. Seems like were the only ones here that dont have it . Could easily be. After 9 11, there was an enormous pressure to make sure that information was shared, which meant that security clearances had to be shared. And in the cybersecurity area, company after company said were being attacked by the chinese, the russians, we need a security clearance to know what to look for, what theyre stealing and so security clearances forhande of people. We need to look at the extent to which we have done that. And begin to tighten the standards. What is going to happen to booz allen, do you think . Two employees now that have been well, one has been arrested, Edward Snowden has not been arrested. The stock is getting hit hard. Any assessment if they suffer any consequences . If this was really a mistake in their part on supervising him, in hiring him, a mistake they committed after snowden, i think this is bad for them. We dont know any of that yet. And so it is probably a little early on what i know to be shorting the stock. But they will get a lot of attention, even if they did nothing wrong and if they really made mistakes in checking his background or supervising him, it is going to go pretty badly for him. What happens in the aftermath of this sort of discovery internally. Do they rescreen, reevaluate, put in new security measures . Im not sure that the standards for contractors and reviewing contractors are or should be different from the standards for employees. It is a question of what information do they have access to. Nsa has gone through a transformation in the last ten or 15 years in which contractors at all levels of skill have been brought in and integrated into the workforce. And so you cant say were going to treat contractors differently from our employees because theyre doing the same jobs that the employees are doing. Is there a concern . This gentleman was able to bring in a thumb drive and thumb drives have been the downfall of many a Security System for a number of companies. People pick up a thumb drive from the parking lot, stick it in their computer thinking it is benign, has some sort of malware on it. When do you have a sense as to whether or not well know if he planted something within the nsa . Im sure his systems are getting a careful scrub. Even if he didnt do it intentionally. If hes online, on his home machine, and using his machine to read that thumb drive, there is a possibility that malware is planted on that by somebody else. I should say some of the worst the most touching cases that i dealt with when i was nsa general counsel were people who just wanted to do their job and wanted so badly to do their job, they took the work home so they could do more work at home after they left nsa. They ended up arrested for the same crime this fellow is being accused of. Mishanding classified information, not supposed to be taken home. But they were trying to get their job done. We dont know thats the case here. Shouldnt jump to the conclusion he was trying to hurt the system. I will take stewart, the other side of this, i no he it se know it seems like a huge deal. If you go back to Robert Hansen or aldrich ames, there seemed to be more high profile cases in the 60s, 70s, 80s. The ability to do a deep audit of every key stroke on the system is now a routine feature of 9 the cybersecurity and frankly the internal security of the system. So people have been arrested because they wanted so desperately to do their work that they took stuff home. There is a Hillary Clinton question in there somewhere, sir. When you say that, do you realize why someone gets up set about her handling of classified information . I do. She was not trying to do her job better with that separate server. She wanted to make sure she controlled the information and that her political enemies didnt have access to it. And in the process she exposed it to foreign hackers. She was more afraid of the republicans than she was of vladimir putin. Thats the wrong set of priorities, i think. Sir, good to have you here. Stewart baker, former nsa general counsel. A statement from booz allen. When they learned of the arrest of one of its employees by the fbi we immediately reached out to authorities to offer total cooperation in their investigation and we fired the employee. We continue to cooperate fully with the government on into this serious matter. 5. 1 Million People with security clearance. Speaking of booze, different one, booming, mexican beer. For constellation, good news. Oil flirting with 50. Will it get there . The closing trades are coming up. You may think you can put off checking out your Medicare Options until youre sixtyfive, but now is a good time to get the ball rolling. Keep in mind, medicare only covers about eighty percent of part b medical costs. The rest is up to you. 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These are the only Medicare Supplement insurance plans endorsed by aarp, an Organization Serving the needs of people 50 and over for generations. Plus, nine out of ten plan members surveyed say they would recommend their plan to a friend. Remember, medicare doesnt cover everything. The rest is up to you. Call now, request your free decision guide and start gathering the information you need to help you keep rolling with confidence. Go long™. Welcome back. Time for the good, the bad and the ugly. First to the good, Constellation Brands, new all time high for the company. The Spirits Company reporting a big earnings beat, fueled by booming beer sales. Remember, couple of years go, they bought the rights from modella and corona. Buying craft whiskey maker high west distillery for 160 million to cash in on the growing brown spirits trend. On to the bad, verizon, worst performing dow component, down by 1 . It is the rising yield that were seeing, ten year, putting the lid on this dividend yielding trade. It is an ugly day for the same reason for the reits. Vanguard down big, led by avalon bay and kimiko. Now to sue her rare why fera fo latest actually, brian with the oil close. Close to 50 a barrel. To jackie deangelis. We had dow 10,000 hats, are there crude 50 hats . I was going to say, no hats down here, but so close, brian, we could just feel it. 49. 97 was the intraday high. When they start getting momentum to the upside and had support from that opec deal that was announced last week, the technicals start to drive the trade higher. Doesnt look like well make the 50 mark today. But many people think we will probably cross that level. Also supportive of these prices today was the drawdown in inventories. 3 Million Barrels when we were expecting a build of 2 Million Barrels and production dropped slightly here in the United States. Still around 8. 5 Million Barrels a day. So at this point it is interesting to watch this trade because youve got a dollar that is strengthening, we would expect prices to go down. And were actually bucking the trend here. That tells me there is momentum right now to the upside. Back to you. Well watch and see. Now to sue herera, cnbc News Headlines at this hour. Thanks very much. Here is the news update. The u. N. Security Council Unanimously agreed that portugals Prime Minister will be the next secretarygeneral of the united nations. The council will hold a formal vote tomorrow morning to recommend him to the 193 member general assembly. More than 1,000 migrants disembarked from an Italian Coast Guard ship in a sicilian port. Nearly 5,000 were rescued by the Italian Coast Guard on that day. At home, the transportation Department Says u. S. Traffic deaths rose by more than 10 in the First Six Months of the year. The dot with safety groups announcing an ambitious goal of eliminating traffic deaths completely and injuries within the next 30 years. Federal regulators announcing new rules. Among changes, issuers have to provide their users with basic account information such as balance and transaction history free of charge. Those new changes go into effect next october. Thats the news update at this our. Back to you guys. Thank you very much. Still ahead, the big interview youve been waiting for. Jim cramer joining us from San Francisco with a major exclusive with that guy, marc benioff. Will he mack a pke a play for t and what is he going to do if he gets it . Welcome back. Sales force shares dropping on reports it is interested in buying twitter. Shares of twitter are high er o the news. Joining us from San Francisco is jim cramer. He has sales force Ceo Marc Benioff in a cnbc exclusive. Take it away, jim. Thank you, michelle. Marc, 171,000 people, what are they doing here . This is a family reunion. They have come back to see each other and give each other a hug. These are people making sales force successful. They come here once a year. More than 170,000 registered to attend. And attending on video. More than 50 million we expect this week as well. You could do 10 billion to 20 billion, it will happen. Of course it is going to happen. It is all about when it is going to happen, not if it is going to happen. You can feel the momentum here. I read this great note this morning. Goldman sachs. Talked about how core, our core is so strong and when she meets with the partners here, she reiterated that feeling. Thats how i woke up this morning. It revalidated something i already knew. Our core is so strong. If your core is so strong, why dont we add back right now 3. 4 billion in market cap. You just deny youre willing to pay for twitter. Whatever the stock goes down, you ask me that question. Ill tell you what, when it comes to twitter, you have to look at it like this. Number one, we look at everything, you know that. Linked in. We look at everything. You name it, we have we look at it. It is in our interest to look at everything. We have to go deep on everything. We have to understand what is possible for our shareholders, what isnt . If you look back at my track record, youll find while i look at a lot of things, i pass on most things. Okay, you have big Share Holders that own big stakes. You talk to your shareholders. A shareholder like pfidelity. You want to satisfy other shareholders besides yourself. Im not willing to start a precedent by having to dress specific deals. If i did all of the deals even though the company is doing so great, even though the customers are so happy, if i started to dress specific deals, where are we going to end up each and every segment, i hear youre going with this company, i heard youre going with that company. The reality is, look, we have to look at everything, we pass on most things. Our decisions have been very good for our company on the vast majority of the deals we do, the stock goes up. Great example, demand ware. Another Amazing Company we brought. Quip. We didnt think we would buy any companies. If you wanted Something Like twitter, why cant you invent it . Youre a great inventor. You can put this thing together. Twitter 2. 0. Make it better. You dont need them. Do it yourself. Lets put it down. We have incredible growth. We have incredible you know, were the Fastest Growing of the Top Ten Software companies and have super happy customers. Thats a good combination. Great technology, great capabilities, but at the end of the day, we still have to look at everything. One way we innovated is not organically, it is inorganically. The acquisitions like geez, i hope to like this one, crocs. That would be fabulous to data mind. I think every Company Needs more data to mine. Thank you for making that point. Thats really mission critical. Does this bring in more money for San Francisco than it does for sales force . This is 200 million for s francisco. The Childrens Hospital has been really exciting. And we have doing great things for vets. And also great things for public education. I strongly believe everyone is going to adopt a Public School gym. An important part of our future and well do everything. Thank you very much. Marc benioff, back to you. Jim, thank you very much. Great interview. You were noting that marc was saying certain things and certain things were happening to the stocks. He passes on most of them. Crm shares, well off session lows, down by 4. 75 . The intrai did shows a clear tick higher with twitter shares taking a slight dip lower but in the green here. It is interesting that jim mentioned heather blini, software analyst. Another analyst out today saying that a twitter deal could destroy up to 25 of the market cap. It will take another two to three years to recover that. Skepticism about the deal. They talked about t rowe and fidelity. T rowe has been an active, vocal tech investor. Oppose opposed the oracle deal. You got to wonder how they chime in on this as the initial Market Reaction indicates that investors would not approve this deal. You think it is a fast growing company. It is flat lining. Flagging metrics. I dont sales force is an enterprise and customer marketing base software company. I dont know what they want with a company just saying, hey, i had tacos for dinner last night. To jims point, about the data, data mining and expanding their presence in Artificial Intelligence, which has been a big push. That was the most recent acquisition. It is all part of this bigger puzzle that we may not see immediately. I did tweet out today the 12 best bird named bans. That could be mined. And that shows twitters value right there. I just got an ad for parrots on my google machine. Catch mad money at 6 00 eastern for more of jims exclusive with marc benioff. Cramer will be joined by the ceo of Constellation Brands, rob sands. And as well as the ceo of paolo alt yes networks and if that was not enough, a guy that wears Country Music shirts for some reason, despite living in california, chris sacca. Early investment in twitter. And cool shirt owner. Of course. To josh lipton. Some news to bring you here on samsung. Aso som Samsung Galaxy note 7, the kind of phones making headlines for the overheated batteries, reportedly began popping and smoking during a Southwest Airlines flight, forcing the evacuation of that flight while still on the ground at louisville. This apparently happened this morning. The phone overheating. Smoke in the cabin but nobody was injured. The owner of that phone is telling nbc news this was a replacement phone that was sent to him. We reached out to samsung and well bring you their reaction when we get it. It has been tough news for samsung, not just the overheating batteries, this morning cnbc reporting that activist investor Elliott Management is taking aim at samsung yesterday, at that google event. Interesting to hear the headsets could complicate that relationship with samsung as well. We have reached out to samsung. Well bring you the reaction when we get it. Josh, thank you. Oil closing on 50 bucks a barrel. Where are prices going from here . The technicals versus the fundamentals next. Hey, jesse. Who are you . Im vern, the orange money retirement rabbit from voya. Orange money represents the money you put away for retirement. Over time, your money could multiply. Hello, all of you. Get organized at voya. Com. It is time for trading nation. Lets all get together and trade crude oil. Shall we . It is moving higher once again. Chris verrone and Boris Schlossberg skrojoining us. What is behind the oil move . Is it all related to your favorite talking point, the dollar or Something Else . Actually, you know, oil has been driven up because inventories have really surprised to the downside. I think you had a perfect storm. With hurricane matthew, probably another week of possibly lower inventories. Oil is moving counter to the dollar. Dollar and oil moving lock and step. The other reason is because it is a boom trade, a bet that Global Economy is not slowing down as much as everybody thought. U. S. Economy continues to run on pace and thats helping that trade. I think oil probably tops out around these levels because of seasonal ty at this level in september. Inventory starts to go back up and probably going to put a cap on the rally above the 50 level. I dont think it is going down much more. I like oil, against gold. I like that pairs trade, thats a trade that will you sell gold short and go long oil, that will stay in places that trend for quite a while. Boris likes it. Chris, do you agree with that point of view or do the charts say Something Else . I agree. This has been an impressive move. Lets put this in context. After the sharp move off the february lows, oil really went nowhere for four months. That was a healthy pause. Broke away through 4855 this week. That was the key level. Were through resistance. We think were on our way to 55. I recognize that seasonal ty is not too favorable over the next several weeks. I want to add weakness an an opportunity to get exposure here. I would note the stocks here are involved as well. And not just the pure plays. Industrials have turned up, rails have turned up. I agree, that is part of the Global Demand story, good sign, not a bad sign. One last point, High Yield Energy sector spreads are making new lows now. That is a sign that all the stress from 2014, 2015, looks to be behind us here. So any pullback in oil viable by our work. Bullish view fundamentally and technically. Thank you, guys, appreciate that. For more trading nation, go to for more trading nation, you can go to tradingnation. Cnbc. Com. Announcer and now the latest from tradingnation. Cnbc. Com and a word from our sponsor. With sleep number, you choose the exact firmness and comfort you want and so does your partner. Amazing sleep for all. The columbus day sale is on now with the queen c4 mattress set only 1399. 98. Plus 24month financing. Learn more at sleepnumber. Com the latest list of the Worlds Best Brands is out, and for the fourth year in a row apple and google take the top two spots. But the best news may be for all you facebook lovers out there. Intergrand global put out the list. What shocked me about your study was just how fast facebooks brand is growing. Why . Well, obviously two or three years ago, they proved that they cracked mobile in terms of the commercial side of it. Of course, what theyve gone on to do is to provide a fantastic platform with a lot of detail for Small Business users and the rest of it. In other words, analysts view that their success into the future is likely to increase. They undoubtedly have a strong brand and appear to be capitalizing on it. So hence theyve gone up 48 in our brand value list this year. On the opposite side is ibm. Thats what i referenced going into the break there. Theyre still top 10 but the brand is still sort of fading. How does a brand fade . How do they slip . What happens . If you take ibm as an example here, they sort of reinvented themselves several times in their history. And i think it would be fair to say that perhaps theyre on the brink of another reinvention. It seems clear that watson is very important to the way they see their future, but when you look at what analysts are saying, and if you listen to what customers are saying, i think for the moment their offer to the market is perhaps not as clear as it has been in the past, and of course their Financial Performance has suffered. But i would say is it that people are just confused, they dont know what ibm is . I think there is a degree of that, yes. I think part of it is to do with the fact they are in a transformation or moment, shall we say. Its clear that the work theyre doing with watson and Artificial Intelligence is going to be a big part of their future, but im not sure whether its exactly clear how that plays out for clients right now. The Biggest Surprise to me was nissan. Nissan is a wellknown name in america but they dont really get i know youre a global study. What is nissan doing right around the world . They dont get a lot of traction here in the states, jess. In other parts of the world, they do, and its very clear the brand is playing a much bigger part in their business. What we try to understand is how brands and businesses grow together. What nissan has done is theyve found a way to commit together all their various markets around the world as well as their product, their environments and their culture, and its beginning to show in the performance of the company and the desireability of the brand. So yes, a coordinated by them around the world. The big surprise to me, guys, is there are other parts of the world. Jez bryant, ceo of interglobal brand. Thank you very much. Check, please is next. Thats why comcast business doesnt leave you there. When you call, a Small Business expert will answer you in about 30 seconds. No annoying hold music. Just a real person, real fast. Whenever you need them. Great, thats what i said. So your business can get back to business. Sounds like my rides ready. Dont get stuck on hold. Reach an expert fast. Comcast business. Built for business. Comcast business. Im stressed trying to figure out this complex trade whats with the dogsized horse . So i brought in my comfort pony. Well, you could get support from thinkorswims inapp chat. So you dont need a comfort pony. So what about my motivational meerkat . Inapp chat on thinkorswim. Only at td ameritrade. We just learned the nsa contractor was arrested for allegedly taking secrets from the government. Taking secrets and whether he inflicted damage himself. With the rise and rates weve been seeing over the last couple days, they have been getting crushed. Utilities tell com the only three negative sectors. Tonight at 5 00, they will name the dividend stocks they think will survive an intel hike. From jeffries, very interesting stock there. Apparently i need to learn more about what ibm does. I just got an email. Thank you for watching power lunch. Closing bell starts right now. Welcome to the closing bell. Im sara eisen in for kelly evans. Im bill griffeth. A pretty good rally today. A pretty good bounce, if anything, after the two down days weve had. Energy sector moving higher as oil nears 50 a barrel here in the u. S. And the financials are getting a boost again as yields rise again. Were going to dig deeper into these moves coming up in just a little built here. The pattern is developing. Developing, thats for sure. Major news