Transcripts For CNBC Power Lunch 20161018

Power lunch starts right now. All right, welcome, everybody. A big show as you can see. The dow, the nasdaq and the s p 500 are all higher. But is the stock market getting a little too cozy with one likely election outcome . Well tell you why the races you arent watching may be the most important of all. Meantime, the big sectors also higher across the board, health care really the standout, shares of United Health are soaring. Also, look at the semiconductor space. Chip stocks on pace for the best day of the month. Intel, big upgrade. Well tell you about that. Brian, thank you very much. Welcome, everybody. Im tyler mathisen. Here is what else is happening at this hour. Millions of Social Security recipients will get a monthly increase in benefits next year. How big . 3 . That is the fifth year in a row that Older Americans will have to settle for those historically low raises. Starting today, at t customers can talk, text and use data while they are in cuba. And samsung reportedly now will set up galaxy note 7 Exchange Booths in airports around the world hoping to stop customers from taking those flammable devices on the flights at the last minute. We begin with as michelle mentioned just a moment ago the first e on our radar today, that would be earnings. Goldman sachs, the latest Financial Firm to beat the street with its Quarterly Results and get a boost from trading revenue. In goldmans earnings release, lloyd blank fine said, quote, we saw solid performance across the franchise that helped counter typical seasonal weakness. David faber will have an exclusive interview tomorrow on squawk on the street. United health topping forecasts on the top and bottom lines. The stock adding more than 60 points to the dow by itself. You see the stock is higher by 19 year to date, nearly 7 right now. Also in the health care sector, Johnson Johnson also posting earnings and revenues ahead of consensus. The companys raising its full year forecast. Among the reasons, increased drug sales, that stock not acting nearly as well, lower by 3 bucks or 2. 5 . Investors at harleydavidson are making a little money today, the stock chart does not tell the full story. Sales here in the United States actually dropping for harley, but the company did reaffirm guidance and said it will lay off workers in a company wide reorganization. More on the hog still ahead. The major averages are off session highs despite bullish calls. Norways sovereign wealth fund, the worlds biggest, has been asked to increase its holdings in equities. Fidelitys contra fund increasing its exposure to tech. So is this a signal of good times ahead for stocks . Lets bring in ernesto ramos. Welcome. Thank you, tyler. Is what this committee thatted avidz that ed advises, is it material to your strategy as an investor . I think it probably represents what other investors are looking to do, so in that sense it would be important and, you know, i never thought i would see the day where people invest in stocks for yield and in bonds for capital gains, but thats actually what is going on today and are you okay with that. Is that a big warning signal of something bad about to happen . I think it might be a warning signal if something bad to happen in bondz because in order to get those returns from bonds you have to see some substantial rate reductions and we might not see those. So im a little worried about bonds more so than stocks. I think stocks have room to go and the earnings season that is just Getting Started is pressing some interesting positive developments there, so well keep our eye on that. I want to talk a little bit about a couple of stories that appeared today, and throughout the week in the wall street journal about indexing versus active management. Making the case that, you know, lots of institutions are going to a much higher percentage indexed. What do you think about that . And what do you advise your clients to do . Where is indexing smart and where is active management smarter . So, as far as indexing just puts money to work in every single stock and it doesnt allow people to differentiate or the market to differentiate the good and the bad from each other until you get, for example, the earnings announcement. So active stock investors, we like that because it preserves some of the inefficiencies that we see in the market, but it takes a little bit more patience for those to come to fruition and so were of two minds and the one hand were able to pick stocks better, but on the other hand, we have to wait until earnings come through to get the realization of our picks. It you ever advise your clients to put money in an etf . Sure. You dont know where to go, and if you dont have a good financial adviser, dont the tools at your disposal, it makes a lot of sense because you get the lower fees and dont get to you get the most managers dont pick the index. If you take the average manager, that is the index. So after fees, the average manager will not beat the index, but always guys that will be better than others, and there is consistencies in some of the better groups. We had a pretty good track record for the last seven years. Low volatility equity fund, part of the Management Team on. What is your benchmark . What is your benchmark there, the russell 1,000 . The russell 1,000. And what percent of its return have you been able to capture and what percentage of volatility at what reduction in volatility . In other words, are you getting 100 of the index, 90 of the index over time at twothirds the volatility or what . The fund itself has been even with the benchmark, but at about a 30 reduction in risk. So on a risk adjusted basis were doing better. We started this strategy not as a fund earlier and january 1 of 2011, and were about 2 Percentage Points ahead of the benchmark on a gross basis. So as long as we get an up down period why are at t and autozone good stocks . For example, at t is a boring stock, nobody really wants to own a Telecommunications Company that is not growing that fast. The except for you. Except for us. Thats the kind of stock that is underpriced. It trades at less than 14 times earnings, dividend yield of 5 . What is not to like about Something Like that. Even if it doesnt go up in price, just take the dividends and reinvest them. You have a decent return on your portfolio from that. But i think the directv acquisition and the International Expansion particularly in mexico is going to do well for them, so were excited about that stock. Thank you. Thank you very much. Appreciate you being here. Mr. Ramos with bmo global asset management. President obama speaking a short while ago at a joint News Conference with matteo renzi at the white house. The president weighing in on Donald Trumps accusations that the election is rigged. I would invite mr. Trump to start whining and go try to make his case to get votes. And if he got the most votes, then it would be my expectation of Hillary Clinton to offer a gracious concession speech and pledge to work with him in order to make sure that the American People benefit from an effective government. President obama short time ago at the white house in the rose garden. How many days until this is all over . 20. Cant wait. Is anybodys mind going to be changed in the next 20 days do you think . I think almost 100 of the electorate has already decided and we dont need to hear more. I was shocked to see all the undecideds in the audience in the last debate. Some of them i thought, well, youre still undecided, what does that tell you . I wonder if theyre really undecided. Me too. Still ahead, Sir Richard Branson is now making waves in the cruise industry. Thats right. Richard branson is going it join us live on power lunch. Talk about the fact that he wants to see an entrepreneur elected president , just not one mr. Trump. But, first, Halftime Report anniversary week continues. Big money and big calls just for you coming up. So what else is new . Hows your mother . Umm. Shes doing good. She needs more care though. She wants to stay in her house. I dont know even where to start with that. First, lets take a look at your Financial Plan and see what we can do. Ok, so weve got. Well listen. Well talk. Well plan. Baird. Welcome back. Big money and big calls on Halftime Report all this week. An allstar lineup today included. Jamie dinan and marc lasry. Scott wapner is here with the highlights. We watched. When with comes to the markets, we got similar view we heard at delivering ail if and yesterday on the show and we had david tepper, carl icahn and Jeffrey Gundlach who were fairly cautious in the current environment in which were in. I asked jamie and marc their view on the markets and heres what they said. Expectations for the u. S. , 2. 2 . Thats good. Highest of all these big countries. Growth, 2. 2 . Expected next year. 18 pe, put on context, markets fairly valued, not cheap, not super expensive, the key is find opportunities, find alpha, find individual stocks, find individual credits that you can make money. There is nothing that seems to be that appealing, right. So youve got to take a lot more risk, so you need to sort of find industries that have gotten hit, or areas that have gotten hit and end up investing so it is not broadbased. It is pretty specific. And when youre running the capital that i think we all run, it ends up being harder, so what youve got to do is sort of find the specific areas. All right, that was marc lasry and jamie dinan. We talked about the future of active management versus passive. Heres the wall street journal today, the dying business of stock picking one of the headlines. I asked jamie whether he thinks issues around hedge funds and active management are more cyclical or longterm and secular. I dont see it. I really dont. I mean, i do this as a day job. Ive been doing a day job for some 30 odd years, one thing i know a little bit about. And what i think is investors and newspaper reporters tend to look through the rear view mirror. Basically what is happening as opposed to what will come. I think what investors need to remember is the last several years, almost the last seven years we have been living in a world of quantitative easing, where basically asset prices, particularly risk assets, stocks, have been manipulated, in a good way to some extent, buy central bank actions. Risk has been basically mispriced in this environment for the last several years because of his qe, you know, zero Interest Rate world. Very interesting thoughts there, guys. In a debate that continues to rage over the future of active management, versus passive, and trying to invest in what has been and especially difficult environment. Jamie sort of said specifically you make an investment based on what you think the facts are, and because of Central Bank Involvement all around the world, stepping in at any possible moment when even you may not expect it, the goal posts move and the trade changes. And it has been so difficult. Yet both of those gentlemen and maybe not surprisingly think that it is going to be more cyclical than secular, that cream of the crop is going stock picking is going to come back. Want to push back on the idea that risk is mispriced given the qe environment. Ive been thinking more about this lately. I wonder, we had this now for what, eight years. At what point do you recognize that is the reality . Can we say that maybe a nonqe world is actually becoming the anomaly and qe is now the norm and risk should be priced based on the environment that one is in. I think people think that Central Banks are going to get out of the way and that youre going to get back to a more normalized, probably the best word, environment. Every august im sure there is people in cleveland who think at some point there is people who think the browns are going to win the super bowl every year and the season starts they realize it is not going to happen, i mean, every year. That would be the cynical view that the Central Banks never get out of the way. This too shall pass. Not cynical, just the reality. The opposite, it is eight years eight years. It has been the reality for the last eight years. Not to say it is going to be the reality for the next 80. The minute everybody thinks it is forever, thats when its not. So the implication in what dinan was saying was that when this era of quantitative easing, low Interest Rates ends, it is going to be a golden age for hedge fund at least they will be active managers will be more appreciated, theyll be able to better do their jobs because theyll be playing on what they would consider to be a level playing field. Marc lasry. Despite the fact that brian i dont disagree, i was wondering if we flip it instead of saying it is an unusual time, maybe we say this is you play the game youre given, right . I hear a lot of Hedge Fund Managers say when risk is finally repriced, well, why do we assume it will be . To that point, marc says hell only take money for three years. And you heard that conversation at delivering alpha, so good, by the way. That i went back and that i went back and looked at in sort of preparation for our interview today and just getting his views on that whole issue. A threeyear requirement, he no longer does quarterly redempt n redemptions because the environment has been so difficult. You cant his point of view, you cant run money of that size and scale on a quarterly basis. You need to think longer term. Where the risk is well priced or not well priced, whether we continue in low rate environment or back to a normalized environment, ill say this, i do not think that the era of 2 and 20 is going to last. It is already broken down. It is broken down and it is going to break down more. Because they cannot, i just dont believe that most of them can justify those kinds of prices. To your point, do you think given where the u. S. Is that the tenyear treasury should be trading where it is . Assets have been mispriced. There you go. I think everybody is misunderstanding my point. If it is raining, everybody is in the field and in the same in the same but when the weatherman says it is going to stop at 2 00 and you make an investment and it keeps raining for another 24 hours or two weeks, the goal posts change. I would agree with that, but im just saying it has been mispriced so long at some point obama says stop whining. Im not saying that. I just think that youre to tylers point they whine. Hes not whining. Block change will change it. Thank you, scott. All right, guys. Dont forget to tune into halftime all this week, big allstar lineup continuing. Nelson peltz, richard meister, barry rosenstein. And mark fisher on friday, one of the best energy and oil traders around. Looking forward to that. Thank you. Good stuff. Thank you, guys. All right. On deck, more investing ideas for you. 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If you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use. Many men arent aware their Health Insurance may cover cialis. Contact your health plan for the latest information. 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. Welcome paback to power lunch. Rick santelli is tracking the action at the cme. Many were glued to one of your interviews where they talked about it is not all about yields when it comes to stocks and price appreciation, when it comes to treasuries. Look at the one week chart of 10s. See the spike yesterday . We traded 181. But the yield closed was way down at 177. Stocks may be the smallest bubble of all, but theyre certainly not going to enjoy the elixir of higher rates and seem to be advertising the ining tha long end. You want to watch the uk market, where volatility is. Look at one week of gilt. Yesterday, the high yield was 120. It settled at 112. As you see on this chart starting on the 23rd, it is a lofty level. When you zero in on it, you see what im talking about. When you see those big gaps between intraday spikes and where markets close in the trend direction, most likely that means either youre about to establish the top of the range or next time you see whether it is 181 and 10s or 120 in gilts, youre probably going to pop through. Youre going to make an Important Note to watch those levels so say the technical traders i talked to on a daily basis. Michelle, back to you. I wrote those down, rick. Ill be watching. Time for street talk, the Analyst Recommendations on the stocks you need to know about. Raymond james is downgraded shares of chipotle to underperform from market perform, citing continued lost sales. A year after the e. Coli outbreak. They think maybe this is the new normal. Those sales may be permanently gone due to wavering customer loyalty. Risk reward, they think it is very negative. They think the downside in the stock will be somewhere between 280 bucks, 330 bucks. Right now 392. That could be lower by 29 . Possible upside, 470. Only 19 gain. They dont like it. If you look at results from jackinthebox, they have done well. So maybe people are shifting, taco is a taco is a taco. They report earnings after the bell. Second stock, ill company new field exploration, more bullish on this big oklahoma stock. The firm increases it Net Asset Value by 35 to 50 bucks a share. 15 more upside. Thats on a stock already up 30 year to date. The analyst sees more higher intensity oil well completions from new field and a lower cost structure going forward. We talked about the scoop and the stack in oklahoma. There is a new oil area to watch. An emerging topic in the oil world. The osage. Okay. Third stock, intel, barclays upgrading the stock. They think intel is poised to return to Sustainable Growth. The reason, better pc trends, which are now only 50 of revenues. Increased diversification is the other 50 of revenues. This is one of the cheapest large cap names in the sector. Only 7. 5 times 2017 ebitda. Well talk about intels earnings. We have been waiting for poise to return to growth, intel for like a decade. Finally, smaller caps call of the day is galapagos. Nice island chain, but also a belgium based biotech, trades here too. Goldman sachs upgrading to a buy from a neutral, top pick in european biotech. Says there is underappreciateiated potential in the companys Rheumatoid Arthritis drug. Pay attention. They boost their target to 75 euros from 55. The tortoise does, apparently, win the race, according to goldman. Are voters already over it . A new poll suggests, yes, why that might spell trouble for the democrats. And republicans have their own fair share of voting concerns. We will talk about all of that straight ahead. Theres no one road out there. No one surface. No one speed. No one way of driving on each and every road. But there is one car that can conquer them all, the mercedesbenz cclass. Five driving modes let you customize the steering, shift points, and suspension to fit the mood youre in. And the road youre on. The 2016 cclass. Lease the c300 for 369 a month at your local mercedesbenz dealer. On a perfect car, then smash it into a tree. Your Insurance Company raises your rates. Maybe you shouldve done more research on them. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. And if you do have an accident, our claims centers are available to assist you 24 7. Call for a free quote today. Liberty stands with you™. Liberty mutual insurance. Time for the your business entrepreneurs of the week. It may look like a scene from the reality tv show, but this group of recent College Grads are actually venture for america fellows, sharing a house and incubating businesses that will eventually open in cities like detroit that are in serious need of revitalization. For more, watch your business sunday mornings at 7 30 on msnbc. Im courtney reagan. Here is your cnbc news update. President obama says drive driving mosul will be difficult but worth it. Im confident that as isis is defeated in communities across iraq, isil will be defeated in mosul as well and that will be another step toward their ultimate destruction. A Coalition Led by iraqi forces began a major offensive to take back the city from isis fighters yesterday. The attack follows months of planning and support by the u. S. Military. Part of the country is enjoying an october heat wave where record highs are expected across much of the south. The northeast is also unseasonably warm with new york and baltimore expected to set new highs. As much as 25 degrees above average. Walgreens customers are being given a new option to ship Online Purchases to stores for free. The service is available at all 7600 locations. And preparations are under way at the white house for president obamas final state dinner. Tonights feast honors the italian Prime Minister and features a menu by celebrity chef appropriately mario batali. Thats your cnbc news update at this hour. Back over to you. Thank you very much. Well, folks, your money is doing pretty well today. The major stock averages are all higher across the board. Dow jones industrial average up 86 points now. And, in fact, nearly every, not every, but nearly every dow stock is higher. Ibm and Johnson Johnson are your big laggards. There is the countdown clock. 20 days to go until the election. Our nbc wall street journal poll showing slumping voter interest which may forecast turnout problems for the democrats in november. However, republicans also have their own share of voting concerns. Eamon javers here with more. Were here in orlando, florida, we have been talking to voters here in the area over the past 24 hours or so, and you do get a sense that a lot of people are just really disgruntled with the choices that they have this year. Voters who are supporting hillary, a lot of them tell us theyre doing it reluctantly, similarly with the donald Trump Supporters we talked to. Here is a sense of some of the people we talked to and what they had to say about this election cycle. Dirty from one side, dirty from the other one, more dirty. It is awful. Right now it is just this election is a joke. I think a lot of people in this election tend to keep their own opinions to themselves because theyre scared of what others might say. And that frustration at the top of the ticket is really a challenge for marco rubio who debated here at the university of Central Florida last night against his democratic opponent patrick murphy. Marco rubio really distancing himself from donald trump without abandoning his endorsement of donald trump. He also separated himself significantly from Donald Trumps talk of a rigged election. Here is what marco rubio had to say in orlando last night. This election is not being rigged. And ill explain to you why it is not rigged in florida and why i hope he stops saying that. Why he should stop saying that. We have 67 counties in the state. Each of which conduct their own elections. I promise you there is not a 67 county conspiracy to rig this election. So marco rubio was leading in the polls going into last nights debate. His opponent murphy tried to tie him very early on to donald trump, the debate began, tyler at 7 00 p. M. Last night. The first mention of donald trump clocked in at 7 02 p. M. From murphy. You can tell the democrats here are hoping that donald trump will drag marco rubio down with him. Well have to wait and see whether that happens or not. Back over to you. Thank you very much. Eamon javers in orlando. During the bruising election season, some have weighed in saying a Trump Administration would bring such uncertainty to the market that the election could cause a crash or a recession. Do the facts bear out those dire predictions . Lets bring in den benn cben cae wrote an article for the website called stop sayining a trump w would cause a recession. Also joining us is jimmy pathakoukis, nbc contributor. Good to have you here. Ben, ill start with you. Youre not a trump supporter, let me be clear about that. You work for a website that pioneered this idea that instead of doing polling, you come up with what are the chances, the odds that somebody is going to win or lose. Why did you write this article that says stop predicting that trump would cause a recession . I wanted to distinguish here between the candidates policies on the one hand, and the chances of what would happen in the Election Results themselves. So there are plenty of policies that trump has and clinton has that would clearly have an economic impact, right, if trump imposes tariffs, limits immigration, if clinton raises taxes, that would all have Economic Impacts and maybe negative Economic Impacts. But there is this idea out there that the election itself, and particularly a trump win, a surprise trump win, would tank the markets, that it would lead to tighter financial conditions, that it would lead to a recession, before even as the chance to put policies in place. Why is that wrong . Because we dont know. Look at brexit, for example, right. All these dire predictions that the british economy was going to completely collapse after brexit, and, again, that may be right in terms of the impact of brexit itself, once it happens. But youve got all these economists who sort of came out, you know, they fired all their bullets before the brexit vote saying it is going to collapse as soon as brexit happens, that hasnt happened, and now you have economists with a real credibility problem and lets face it, economists didnt need help with credibility problems. What about this idea, the uncertainty is so bad for the markets, ben . Yeah, i mean, so i think this would be a major surprise if trump wins. And so i would not be at all surprised if you saw some significant market volatility, that volatility could go in either direction, right . Trump wants to cut corporate taxes, wants to cut personal income taxes, reduce regulation. You could easily see a shortterm business boost. The impact of those policies over the longer term if he puts them into place could easily be negative. But, you know, if he does win, and if he does get a chance to start putting the policies in place, economists will have to be able to have the credibility to come out and say, look, imposing tae ining tariffs is a idea and theyll lose that credibility. If trump wins, are we doomed . Are we doomed . Im not prepared to cast a spell of doom on the u. S. Economy. Im not prepared to do that. Thank you. I will say there should be a lot i think ben is basically right. I think there will be a lot of shortterm uncertainty at best. There is going to be half the country, which will be stunned that trump won and also the half of the country is probably going to worry hell take some sort of authoritarian dictatorship. A lot of unhappy people, uneasy people and not a stretch to say there could be a negative impact. I think beyond that, you have to see what will trump do. For instance, the trade stuff. Is he going to immediately use the 301 power to start slapping tariffs against chinese goods, is going to declare that chinese are currency manipulators or would it be a longer kind of multiyear renegotiation process against just much like the brexit example, so we dont know. But, i mean, it will be an uncertain time and there has been research linking uncertainty to economic weakness, the degree to which, though, thats highly uncertain. Ben, historic analysis on election impacts on markets . Yes, if you look back at elections historically, the markets have tended not to move that much. 2008 is a crazy example. It is coming right in the middle of the financial crisis. But if you look back at most other times there havent been that much in the way of moves, and in this case, you know, if markets are really that nervous about trump, you would expect to have seen markets move in relation to his chances of winning. There have been some analysis to try to point to some effects there, but others that havent found it, really been no clear movement where the markets are fearing a trump win or for that matter hoping for a trump win. Jim, im interested in your perspective on lets just stipulate that from what we have been able to see that mr. Trump is a more volatile personality than has typically been seen in american politics. And that volatility makes people wonder what he would be like in the white house. And that that causes the uncertainty as much as anything. The matter of his policies and what hes actually able to achieve were he to become president , we really dont know how much he would be able to get through or to your point whether he would move swiftly on trade or whether it would be a longer term negotiation. But the real question is, an economy is made up of human beings reacting to other human beings. Bankers make decisions based on their handicapping of what the return on the investment or the ability of someone to repay a loan would be. How does the personality play out across the economy and markets . Right. I think to the extent that people worry, i think they maybe worry less that hes going to put through some crazy tax plan or Something Like that. I think theyre worried that how would he react in a crisis, a Foreign Policy crisis and he seems very volatile. Kim jongun fires a missile. Right. Hillary clinton is far more of a known quantity, i dont think youll have that kind of concern. And, but, we should say we really dont know to what what those trump policies are going to be and i think those are still important. But, again, were not exactly sure what Hillary Clintons policies are going to be. Are we going to get the campaign Hillary Clinton or get the wikileaks version of Hillary Clinton, more pro immigration, more trade. Well have you do that article next. Ben castleman, and jimmy pathakoukis. Tune in for tim kaine 4 00 p. M. Eastern time. Tomorrow night, cnbc live coverage of the third and final president ial debate starting 9 00 p. M. Eastern time, live from las vegas. Straight ahead on power lunch, why shares of United Airlines are doing so well today. Were going to hear from the ceo. Plus, what ford just said that has some people starting to get a little bit nervous. A little 21 pilots. Whats with the dogsized horse . Im stressed trying to figure out this complex trade 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. Welcome back. United airlines reporting earnings and revenue that beat the street. Phil lebeau sat down for an interview with the ceo, oscar munoz. What did he tell you . Theyre improving their performance. Some look at united as with the other airlines and say, look, still head winds out there when it comes to passenger revenue, but moving in the right direction and thats one reason why i think youre looking at shares of united moving higher. The shares did move up on the company reporting a beat on the top, on the bottom line on the third quarter. Passenger revenues down 5. 8 in the third quarter. Guidance is for them to be down anywhere from 4 to 6 in the fourth quarter. Likely improving from that 5. 8 decline. And then improving in 2017. As for the rest of the business, china and latin america, that business is improving. United is struggling a bit and really Many Airlines are, it is when it comes to the transatlantic routes to europe, in part because you got so many low Cost Carriers in europe that are adding routes to the u. S. , putting pressure on fares. Here is oscar talking about that part of the business. It is probably one of our weakest markets, it has been, not only the brexit hangover and the capacity issue. We monitor that, work through that, work on a global basis, china is looking a little better, latin america for first time in a while is looking positive. Domestic business is showing some signs of improvement. But, yeah, atlantic continues to be our biggest issue. Hasnt been a great year if youre a united shareholder. The stock has done better. Overall it is relative to its peers, performing better. 2016 will not go down as a great one for airline investors. So, thats the story with united. But a lot of news both in the airline front and as well as with the auto industry. Making news, ford halting production of the f150. Why . You got too much inventory. They have to bring down that inventory. The way to do that, especially when in the auto market is at a plateau, where it is not falling, but youre going to see inventory backing up because youre not growing sales anymore, youve got to halt production every once in a while. Thats what theyre doing, not just with the f150, but a few other models as well. Does this suggest that the model itself is not proving as popular as they thought or they misjudged the strength of the economy, specifically the strength of the Building Trades where a lot of the cars are used. Not necessarily that they misjudged it, tyler. It is that you have a market that has now kind of hit a plateau or an evening out. Therefore, the production schedules are going to be tweaked every once in a while. Right now they have a bit of a buildup, not just with the f150, but few other vehicles as well. We should point out, this is not uncommon in the auto industry. Youll see other automakers do this as well. This is the reason why. 17. 5 million were sales last year, where well be this year probably. A lot of people as tyler pointed out associate the f150 sales with Housing Construction in the United States. So when we see it peak, should we read anything into housing . Well, thats an interesting point. If it stays at these levels, you can sit there and say the Housing Market will remain strong because the sales this year for the f150, theyre up compared to past years. Theyre up not as high as they were in the early 2000s, but very strong nonetheless. They got two plants that are cranking out that truck on three shifts each. So this is more a case of they backed up the supply here a little bit and want to give their dealers relief. Do people like the truck . Ive not heard look, at the end of the day, i havent heard people complaining that it is an aluminum model. You get people very loyal to a brand. Ford truck owners stick with ford. Chevy truck owners stick with chevy. Thats how it is. Phil, tesla shares taking a brief dip. They bounce back a little bit. Tesla maybe tomorrow were going it get some mysterious announcement . Lets talk why the stock took a bit a dip and has come back. There was some chatter that was out there on the internet. Cnbc first originally tweeted out that tesla was changing the delivery date for the new model 3 to mid2018 because the website for tesla has said put in your order now if you want delivery in mid2018. The guidance from tesla has not changed. It still plans to deliver the model 3 late 2017. What has changed is the website is saying, if you order now, if you want to get your place in line, youre going to get that vehicle in mid2018. There is a backlog of if all of these people who placed reservations come through, a backlog of almost 400,000 people. Tesla is basically saying, if you want one, and you put in a reservation now, youre going to get it in mid2018. Some people read into that. That they were changing their delivery guidance. That is not happening. Phil, thank you very much. Appreciate it. He took over one of trumps casinos in Atlantic City and transformed it into the golden nugget. But hes done a lot more as you can see. Some of his properties, who is he . Hes billionaire entrepreneur tim tillman. The lexus rx, rx hybrid and rx f sport. This is the rx. Elevated. Get up to 5,000 customer cash on select 2016 models. See your lexus dealer. Welcome back to power lunch. Our next guest took over one of Donald Trumps casinos in Atlantic City, back in 2011, and it is now called the golden nugget. Talking about texas billionaire entrepreneur tillman ferrtitta. He hosts billion dollar buyer and the new season premieres here on cnbc on november 22nd. We cant wait. Were thrilled hes back here to join us on power lunch today. Great to be here. Sorry only for a little bit, but they got my day occupied. Pr has you busy. You own what used to be a trump casino in Atlantic City. Did you do the deal with him . I think there was a couple of conversations. He was already out. They had taken it over. Were dealing with the lenders at that point. But, gosh, i had to do a lot of work on it. It was a mess. The casino was a mess. It just just the condition it was in and there had not been money spent on it in years and years. It was just dlilapidated. Yes. I spent 150 million on it, it is a beautiful casino. What is amazing is, when i took it over, the market was doing 3. 5 billion in gaming revenue. It is only a 2. 5 billion Gaming Market today. When i bought it, it was losing 12 and today it makes 25 million in ebitda. It is all about operations and people want nice. So if you have a a good operator, and it is nice, people are going to come. Should we read anything into a donald Trump Presidency based en what you said . I dont think were going to worry about a donald Trump Presidency so we dont need to go there. It is all about taking care of the detail. Does donald know how to get stuff done . Yes. Dont think donald is a developer, i dont know if hes an operator. We were in houston together. In houston together a few times. Yes, we have. We talked about oil and the impact. Were at 50. You were critical of the restaurant industry. Worried about it with oil. Oil still low historically if you will, are you seeing it impact your restaurant businesss . It is funny because the whole country is soft right now on the restaurant industry. And we really are not any more in texas than we rarely are everywhere else. In tnot an oil thing, a bigg thing. What is it . I dont know. I dont know if it is the Grocery Store where you buy everything prepared, not the fast casual, it is everybody. Yesterday, the september numbers came out, and forget the price increase, it is the 3. 6 traffic that is down in the restaurant industry. Is there a connection yesterday, the numbers came out on netflix and how good they were. The people are just staying home more. And dominos. Delivery. I hate to say this, but i think that people could be staying home and theyre Binge Watching and just call and order something out and it is more casual or it is pick something up at the Grocery Store. Im not happy now because people are not anecdotal story of one, im tired of eating out. Im done with it. There is not a new cool thing there was a peek restaurant, all this cool stuff out of europe. And eating crazy things. And, i dont know, done. The problem is is that the labor costs have gone up so high that we had to raise our prices. And maybe people are looking at the prices and are just a little scared. What we did with minimum wage and a lot of these cities are crazy numbers. And once again, the politicians dont have any idea what tip credit is, where you have a way to make hundreds and hundreds of dollars a night and they make the same. Most politicians have been in office since before restaurants were created. There is no term limits. I remember and you got food costs going up, parking costs going up and nearly every city. If you can still park, they changed things. So, dominos, talking about that later, theyre bombing. Netflix is booming. People are sitting at home. We talked about this hedge funds, how do you change that . How do you alter your businesses, your hundreds of restaurants . You want to do more takeout and make it easier. The delivery for casual dining and high you would be shocked at the martin steak houses that the takeout youre getting all of a sudden. Really . Mortons . Mortons steak house. I think there is something happening out there right now that you can relate, netflix and dominos. People are sitting home and Binge Watching and saying lets just order a pizza. I think thats happening. Got to talk more. Stick around. Says right there. And you will. For a little while. Sir Richard Branson entering new waters in the cruise industry. Reboot there. Well get the scoop and his take on the election and a whole lot more. And his recovery from a pretty serious bicycle crash. Well talk about all kinds of stuff. Welcome back to power lunch. Breaking news on the fed. Steve liesman has it. The case for a rate hike looks to be building at the Federal Reserve. According to the recent discount rate minutes just released. They show that nine Federal Reserve banks, boards of directors, voted to ask the Federal Reserve board to raise the discount rate by a quarter point in september. Those nine banks, boston, cleveland, richmond, dallas, san francisco, philadelphia, atlanta, the new addition, st. Louis and kansas city. It had been eight back in august. The three banks that do not want the discount rate raised, minneapolis, new york and chicago. What happened to those requests . Yellen, fisher and three fed governors, board of governors of the Federal Reserve, they oppose that discount rate hike, theyre the ones with the decision. And they decided to keep the rate unchanged at 1 . Just a quick word on how this works. The boards of directors of the banks make that request, doesnt come strictly from the president. Think of it like the d. A. In the grand jury, they get what they want, they guide them. They saw the economy and labor markets improving, Economic Activity expanding at a moderate pace. The consume wears seen as positive. Housing and commercial construction were seen as solid. But some worried about Global Economic weakness and global downside risk. Thank you very much, steve. Tilman still with us. Susan lee here. We have a new name in cruising, Virgin Cruises has been rebranded today as virgin voyages. And it is expected to sell sail in 2020. Theyll start with three ships which they signed a deal for using more clean tech than fuel in the future. When the ships are ready to go, virgin voyages will operate out of miami and sail through the caribbean. It is a joint venture. Lets get live to miami, Sir Richard Branson and tommy galpin in a power lunch exclusive. Thank you for joining us today. Sir richard, lets start with you. Im wondering why youre getting into cruises when you sold out of airlines . Well, ive never been on a cruise ship. I never wanted to go on a cruise ship. But what i did feel was that we could create a Cruise Company with a difference. One where people like myself did want to go on, where they could go on beautiful voyages and they can have an absolute blast. And where we can get everything right that i think other cruise ships have not necessarily got right. So well see well see whether what our team have created delivers, but, you know, we have managed to deliver i think in most other industries we have been into and shaken them up and i believe we can do the same to this particular industry. They say cruising has too much capacity, too many ships in the water, so in 2020, do you think that will be cleared up for virgin voyages . We will appeal to a whole new demographic. Were not competing with the big players out there. We think of ourselves as a small boutique player going to create a different experience. Were going to have the most gorgeous and glamorous ships out there and create an experience that is unparalleled in the industry. So we dont think this is true competition. Give me an example of what is going to be different, tom. You and sir richard say it will be a difference experience, a different look. Give me some specifics. It all starts with listening to our consumers. We spent time with our research and talking to our consumers. Theyre available on our website to provide feedback and were listening to them and were in the process now of designing those ships and creating those experiences. So well be releasing details of that in the near term. What we did do is we Just Announced some of our key milestones, well have steel cutting beginning in february and toward the end of next year. If i can just say, one quick example, today we can show off a little bit. We went into the hotel industry. Our first hotel in chicago, we had a blank sheet of paper, today Conde Nast Traveler readers voted best hotel in america. We went into the Airline Industry for the last ten years, voted best airline in the states. We went into the game safari industry in america, sorry, south africa, and today conde nast readers voted it the best hotel in africa. So i think what we do is we take a blank sheet of paper, we go into an industry and i do think we know how to create something really, really special. Got a Wonderful Team of people. So, richard were not guygoing to unveil what were doing. I was at your oxfordshire resident with mark kelly, we walked around the whole property, you were giving us Great Stories that day. I think we were there for a virgin unite conference or something and it was great. Let me ask you something, youve never been on a cruise ship. Im sure youve been on a yacht, havent you . Going over to necker or is it go to be the same when we get on a yacht . It will be a virgin experience. And i really look forward in a couple of years time to taking you all on it and showing you the difference because we have got two years, ive already seen exactly what were doing. And it will drag many, many people, never been on cruise ships on to cruise ships. And thats our aim. You sail in 2020 . 2020. Thats right. Were the first ship, the second ship in 2021 and the third in 2022. What is important about our ships is we purposefully didnt build these massive ships. When we listened to our consumer, scale was a very important thing, they didnt want mass. Were building smaller ships that we can provide a more intimate experience. Sir richard, you were vocal when it came to the brexit vote. Any updates on your views since then . They were pretty negative. Im very sad for britain. Ill very sad for europe. I think, you know, people have shot themselves in the foot. Were seeing disastrous consequences with the way the pound has dropped and this is, you know, this is a number of years before we actually brexit actually takes place. The our country dropped from fifth to sixth behind france. And so it is it has been very, very little to be gained from it and there has been an awful you dont think the currency drop makes the country more competitive . Helped out the stock market or companies that depending on their the top hundred British Companies have done shortterm benefited from the earnings, the dollar earnings and overseas earnings. The bulk of British Companies, small companies, medium sized companies, are suffering. And they will, you know, they will suffer and youre going to find soon the british people are going to see the cost of goods going up, job losses. They will do you think, sorry to jump in, it is brian sullivan, do you think it is going to happen, though. Youre a betting man. What do you put the odds on brexit never happening at . I think it is quite important to see what happens to a court case taking place at the moment as to whether or not the house of commons will have a free vote in it. The referendum was just an advisory referendum. And i think the conservative party trying to hold their Party Together will try to push it through, despite the damage it will do to the country. But if it goes for a free vote in the house of commons, we know withthirds of mps were against it. And that would be quite interesting. And i think that once especially if it is a hard brexit, i think once people see the terms and see the consequences of what is happening, things could change. Lets talk about the American Election of which youre an astute observer. Like cruising, something you never had the opportunity to vote in. Never been on one of these cruises. What do you think of the election and how it is going. I read that you like the idea of having it an entrepreneur lead the country, but not this particular entrepreneur. Yeah, look, i think one day america will benefit from a u. S. Citizen who is a great entrepreneur, somebody like Michael Bloomberg or whatever, running the country. But as i say, i certainly dont think that the entrepreneur that is running to run this country is the right one. Why . Hell be quite for many reasons. I think, you know, you ive listened to what he had to say. And i think what hes had to say is dangerous and hurtful and and, you know, hes not a good listener. Hes not somebody i think could get a great team of people around him to run this country. Sir richard hes had a lot of disaster with his companies, hes been bankrupt i think three times. Despite being given a lot of money from his father in a silver spoon. And i just dont think hell be the right person to what we need is a great entrepreneur, and im sitting next to perhaps the greatest entrepreneur of all time. Too bad you couldnt run for president. It would be great to see. I dont have the i dont have the right accent, thank you very much. It would be fun. I guarantee you it would be fun. It would be fun. Sir richard, one more question for you. You said you cant believe the American People would be so stupid as to elect donald trump. 40 of the electorate backed donald trump. Im wondering if you think you insulted 40 of americans. I may have said that word, but, you know, i certainly dont want to insult a lot of americans. But, look, i think a lot of people are blind to i happen to have met him, i had lunch with him. And the lunch was extraordinary. And i remember leaving thinking, you know, i couldnt quite believe what i had heard during the lunch. And, you know, and i had lunch with Hillary Clinton where, you know, she is debating issues like, you know, gun control and shes debating issues like the Death Penalty and shes debating issues like syria and having and listening and having a really, you know, really good discussion. You dont get that from donald trump. And, you know, i dont think i dont think you would if he was in became president. Sir richard, i got two pieces of good news from both of you. Number one, youre going to be cruising together soon. Number two, the election is almost here and we can move on and get on a cruise and forget about the whole thing. Thank you, both. Thank you. The entire country should go on a cruise after the election. That would be great. Is it on you . Im in. Were all going to necker. A voyage, not a cruise. If he became president , it would be new meaning to virgin america, right . I like that. Funny. Thank you. He might make me go on a cruise on his ships. His airline is real good. How many restaurants now . 500. About 500. When you run the restaurants, do you say if hillary wins, we need to do this, if trump wins we need to do that . Is there any major strategy shift or see how things shake out . What you really are most concerned about is she really lets all the states continue to make their own rules, and just run minimum wage and life wage at such a ridiculous number that you cant operate. Thats whats happening now. Were pricing ourselves out of the market place because we cannot keep up with the labor costs. Labor costs, used to be a 20 expense, it up over 30 now and will go 40. Dont you think some states will learn, the state competition is great, states with higher minimum wages, states with lower. When they see far greater job creation in states with lower minimum wages, the other idiots will learn. People like to get reelected by saying i got the minimum wage raised because theyre catering to the masses and not the classes. At the same time, everybody is always laying people off, and finding a way to look at your menus, theyre being streamland, fewer items because of prep in the kitchen. Youre trying to get rid of employees every time they did a huge minimum wage hike. Thank you. Glad to be here. Zbl glad to be here. I know youre busy. I would love to be here longer but they wouldnt let me. Who is this mysterious they . They want to do promos for the new show. I dont know what they think, but we like to have you. Come back anytime. Netflix and dominos, we talked about them and harleydavidson stock soaring but for different reasons. Well break it down. Streaming, steaming and loud pipes coming up. Recently, a 1954 mercedesbenz grand prix race car made history when it sold for a record price of just under 30 million. And now, another mercedesbenz makes history selling at just over 30,000. And to think this one actually has a surroundsound stereo. The 2016 cla. Lease the cla250 for 299 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. The dramatic music cues earnings central, two stocks moving sharply higher after releasing their profits this morning. Dominos pizza and harleydavidson. Lets start with harley and landon dowdy. What did we see that is driving the report . Actually we saw were seeing the stock is revving up, up 8 . Even though u. S. Retail sales are down, they have this hot new engine, the milwaukee 8 engine. Dealers were smart. They brought people in, had demos, open houses, and the people liked them because they got the suspension, lack of vibration, they got Heat Management and management thinks this is going to help drive q 4. With all this enthusiasm about the stock, what did they say in terms of guidance . Not so much in terms of guidance. They expect the same shipment target which is about 264,000, however, they did announce a job cut as well as restructuring expense, about 20 to 25 million in q 4. He has you have a fleet of vehicles, do you have any motorcycles . I do not. But a friend of mine is selling one of his harleys. And hes a friend, hes moving to germany. Youre tempted. Im tempted. Theyre very loud. Thats good. So are you. Tune you out. Thats good. Landon. You landed a good one. You can come back anytime. Thanks for having me. I like it. Thats good. The sales i bet you look great in a jacket. Sales weakness, whats driving it . I dont like my neighbors. Michelle is a great neighbor. U. S. Retail sales are struggling, down 7. 1 and theyre saying this is because of oil, this is because of softness in used vehicles and discounting the competition is extremely but theyre putting a lot of money into the riding academy, maybe you should do, and theyre hoping that will bring more bikers in. What did i do . Sit here quietly. Every five minutes with a sarcastic remark and get back out. Literally. Just dip back out. When does carolina play Virginia Tech . Thats funny. Carolina woman. We play virginia this weekend. You win. I like landon, thank you. Good stuff. On to pizza if you have a harley, you can ride off to dominos pizza. Shares are surge iing, earningse strong. Peter slay, where is the rise of ordering over Smartphone App disproportionately benefiting domino o dominos. The industry is growing 1 to 2 a year. What is happening is youre seeing dominos Customer Acquisition costs, comps are rising 13 this year. And the last quarter you saw 13 comp and unit growth. Theyre taking significant market share. Their Customer Acquisition costs are on a digital side, so much lower than their peer set, the small mom and pop group, but they can keep their prices down, not raise prices. Theyll cut back on tv, which is expensive, go to the smartphone, twitter, facebook, whatever it is, and that works for them. They will definitely need tv. But, the Customer Acquisition costs so low, keeping prices down is driving traffic to their stores while competitors continue to raise price to offset labor pressure. What is next for domino ose. You raised your price target today on dominos. How are they going to get there . I see a Pizza Company stock up 50 in whatever couple of months, you got to wonder. How much more can it be . A lot of dough. It is. Look, ive been asked the same question for years now. How do they get to the next level, they continue to find a way because the market is so fragmented, still 50 of the category still small mom and pops. A lot more market share to come. Poor mom and pops, will they go out of business as a result of all of this . I think the ones that are competing on value, they are, theyre bleeding. And the ones that will have a premium positioning, i think theyll last longer, but i wouldnt want to compete on value against dominos. You need scale . You need scale. Okay. Peter, a pleasure to have you on, again, raising his price target on dpz, thank you. By the way, the dominos story outdone today because jim cramer is sitting down with Patrick Doyle for an exclusive interview. Be sure to check that one out. Movies, cars, business services. One of those isnt as exciting as the other two, but theyre all in good, the bad and the ugly. Speaking of ugly, wait until you see what forced one pitcher out of a basketball playoff game. Thats coming up. 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. 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. Welcome back to power lunch. Time for the good, the bad and the ugly. First to the good, netflix shares, up 19. 5 . Earnings doubling the estimate and netflix reporting Strong Subscriber growth. More on this high flying stock in the next half hour. Really helping to lift the nasdaq. Heres the bad. Shares of ford motor down, ford announcing a temporary shutdown of truck production in a few plants. Thats affecting 13,000 workers. Ugly day for ww granger, company beat forecasts but stock is now at an 8 month low today. Thats after nair rogrrowing th guidance. A weird scene during the baseball playoff game last night. Indians starting pitcher trevor bower removed in the game in the first inning, his hand was dripping with blood. He cut his hand last week while working on a drone apparently. His pinkie finger needed ten stitches but the wound reopened during the game. The indians managed to hang on without bower and are one win away from sweeping the blue jays and getting into the world series. Never seen that, anything like that before in baseball. And apparently there is a rule in baseball where you cannot wear any bandage on your throwing hand. Thats to make sure there is no shenanigans or anything, i assume. Cant have anything there. Stitches i guess are okay. President obama offering some advice to donald trump. I would advise mr. Trump to stop whining and go try to make his case to get votes. But is there any truth to mr. Trumps claims that the election may be rigged . Well get a report on the Voting Machines and ask top political analyst larry sabato what he thinks. 21yearold female. Heavily into basketball. Wait. Data just changed. Now shes into disc sports. Ah, no shes not. Since when . Since now. Shes into tai chi. She found disc sports too stressful. Hold on. Let me ask you this. Whats she gonna like six months from now . Who do we have on aerial karate . Steve. Steve. Steve. And alexis. Uh, no. Just steve. Just steve. Just steve. Live business, powered by sap. When you run live, you run simple. Or the freedom to choose what doctor you want to see. So if you have medicare parts a and b, consider an aarp Medicare Supplement insurance plan, insured by unitedhealthcare Insurance Company. Like all standardized Medicare Supplement insurance plans, these let you choose any doctor who accepts medicare patients. Youre not stuck in a network, because there arent any. Plus, these plans help cover some of the part b medical expenses medicare doesnt pay. So why wait . Call now to request your free decision guide and find the aarp Medicare Supplement plan that works for you. Like all Medicare Supplement plans, youll be able to stay with the doctor or specialist you trust, or look for someone new as long as they accept medicare patients. But unlike other plans, these are the only ones of their kind endorsed by aarp. Rates are competitive. So call today. And learn more about choosing the doctors youd like to see. Go long. Im courtney reagan. Here is your cnbc news update. Officials say a wildfire in Southern California has burned 15,000 acres and is 0 contained. It forced nearly 200 people from their homes and burned several structures. Still, no word on the cause. Park officials were out early this morning, rounding up swans on floridas lake morton. It is part of an annual program to check the animals health, which includes giving vaccinations and microchipping. The lakes original swans were a gift of Queen Elizabeth in 1957. Spice Company Mccormick is voluntarily recalling club sized containers of the taco seasoning due to possible undeclared milk allergens. The impacted bottles have sell by dates of june and september of 2018. Too bad dorothy cant tap her heels and fix her famous ruby red slippers. The shoes worn by judy garland are in need of major restoration. A Kick Starter Campaign was start started. Thats your cnbc news update at this hour. Back over to you. Get it, a Kick Starter Campaign for shoes . Totally. Thank you. Now to Julia Boorstin with a news alert. Walmart owned Video Service voodoo, which sells video download oz on demand, is launching a new service, free streaming movies with advertising breaks, offering big name titles like true grit and mad max. The real play here more than the ad revenue will be getting people to try out voodoo app. It is no coincidence that this news comes on the heels of netflixs far better than expected quarter. The market for streaming video is clearly massive. Should be remember that walmart used to drive a lot of in store traffic with the business that preceded streaming, dvd sales. Back over to you. Julie, thank you very much. The oil market closing for the day, crude up slightly at a new york city right now, saudi arabia is busy pitching its First International bond offering to investors. Jackie deangelis live with that story, a big one, maybe the biggest ever in the bond market. Good afternoon, brian. The members of the saudi finance committee that were here pitching u. S. Investors for the deal concluded their luncheon about an hour ago. Investors are saying they expect the books to close this week. In terms of pricing, were looking at 1. 6 over the yield on the fiveyear treasury note. Were looking at 1. 85 over the tenyear. And 2. 35 over the u. S. 30year note. Investors that are hunting for yields may in fact find it here. But, remember, there are risks associated with this deal. First off, the kingdom is saying theyre going to use the proceeds for their operating expenses. The expenses have gone up since oil prices have begun down. And also, right now, oil prices are supportive in that 50 range because of the framework for a Production Cut that was set out now in algeria. Nobody knows if opec will follow through at the end of the november. Right now, as i said this deal is expected to be about 10 billion, but still a lot of interest, analysts are saying it could be twice oversubscribed. Would be one of the biggest offerings this year, all and all from the gcc, looking to raise about 60 billion in offerings like these by the end of the year. Back to you. A lot more to come. Maybe well get it. Thank you, jackie. In this election, nearly every state will be using some kind of Voting Machines that are ten years old. Or even older. Many of them run windows 2000. Are they vulnerable to an attack . Aditi roy has that story. The good news is that the possibility of a cyberattack is very remote according to experts we talked to because most voting systems are not connected to the internet. But voter machines are aging and states dont have the funds to pay for new equipment. 43 states have Voting Machines that are at least a decade old, which is close to their life span according to the Brennan Center for justice. Thats a nonpartisan policy group at nyus law school. The department of Homeland Security reports 33 states have accepted help from the agency to provide sort of a cyberhygiene scan on their election systems. And most of these machines are running on Outdated Software like windows 2000. Thats according to gregory miller, cofounder of the oset institute which works with Election Officials to update infrastructure. Lets face it, at the end of the day, this machinery spends months of bowed silence and cold dark storerooms to be awoken for 24 hours of sheer chaos. Not exactly the kind of machine where youre going to get that return on investment that makes it that warrants its engineering and reliability. Currently there are two bills in congress attempting to address these problems, one would restrict which voting machine states can buy and the other would require that the department of had Homeland Security declassify voting systems as critical infrastructure, which could allow for more dhs support and protections. Back to you guys. Thank you very much. The candidates facing each other in the final debate tomorrow night, but are voters already tuned out . And could that lead to lower voter turnout on election day . Lets bring in larry sabato. Hi, larry. Lets start with the idea of turnout. Do you expect it to be above average, average, below average and why . I expect it to be lower than 2008 and maybe lower than 2012, but it will actually be above average in 1988, 1996 and 2000. We have half of the voters turn up and half not. You can be certain that we will at least be somewhere in the 50s. And there is great interest in this in this election, despite what some analyses are suggesting. I think well have a good turnout. A good turnout. Lets talk pivot to the idea of voter fraud and rigged election, mr. Trump is making those charges practically every day. What do you make of them . I make of them that it is both ridiculous and irresponsible to suggest that the election is rigged. Donald trump has zero evidence, zero evidence. There is none. Now, could something happen on election day if somehow the russians hacked into one states system . Yes, it is possible. Obviously the authorities here are trying to prevent that. But this is simply trying to trump trying to prepare his followers for his very likely defeat. Another excuse. Is the race going to be close . I dont think it popular vote and the Electoral College. It always is. The Electoral College magnifies almost any popular plurality or majority. Thats one good thing about the Electoral College, it helps a president build a mandate even when the popular vote perhaps doesnt suggest one. Back to the issue of Voting Machines, marco rubio brought this up, to talk about a nationally rigged election is very difficult when actually elections are conducted county by county. Covering latin america, there are some countries that have decided to go with the National System and i would be worried about those National Systems getting hacked. Tougher to do at the county level . Youve raised a very good point. And those who are pushing for a National Kind of machine have ignored the fact that if you crack the code, on that machine, potentially you can affect everyone. I favor the current system. It isnt just that 50 states plus the district of columbia have separate systems, within states cities and counties have different systems. Thats an important protection. So when we hear, for example, aditi roy reporting there is some talk about the federal government passing a law good what kind of machines that could be bought, that makes me have very nervous. I like states competing even at this level. Like many mandates, that will back fire, i agree with you. Lets talk about strategy tomorrow night in the debate. Is mr. Trumps best strategy to against mrs. Clinton in light of everything that has happened, to continue prosecuting his case very personal case against mrs. Clinton, against her husband, against the rigged election, the media, the clintons, the elites that are dominating it, or is he better off potentially focusing on policies and plans for the country . Hes better off with the latter, but you and i both know hell do the former. Because he cant help himself. Thats just the way he is. Now, if hes smart, at least part of the time hell return to the issues of the economy, terrorism and others that actually got in the nomination. But you know very well he cant resist. And mrs. Clintons best strategy would be what . Would be not to screw up, shes winning handily. That sounds pretty simple. Larry, always great to see you. Thank you so much. Democratic Vice President ial tim kaine will be on closing bell at 4 00 p. M. Eastern time. Dont miss that. Shares of netflix are soaring nearly 20 today. If you missed out or can you still make money in the stock . And why did delta get a Fashion Designer to redesign uniforms for its employees . Is that going to make any difference in how air travel comes out for delta . Power lunch will be right back. Hey nicole. Hey i just wanted to thank your support team for walking me through my First Options trade. We only do it for everyone gary. Well, i feel pretty smart. Well, were all about educating people on options strategies. Well, dont worry, i wont let this accomplishment go to my head. Im still the same old gary. Wait, you forgot your french dictionary. Oh, mucho gracias. Get help on options trading with thinkorswim, only at td ameritrade. 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. Welcome back to power lunch. Delta airlines unveiling new uniforms. Get this, designed by zach posen. What is delta hoping . The new fashionable uniforms will accomplish. It has been a decade since they upgraded their uniforms. They said it is time to update the image. So the airline hired zach posen to create a very different type of runway look. Posen spent 18 months brainstorming, researching, even had some on the job training, he helped with the jfk ticket counter, lifted luggage, served peanuts in flight. Delta employees also had input from functional ty, durability and the most surprising change of all, the color. It is passport plum. Not all 60,000 personnel getting the new zach posen uniforms in early 2018, there is some red and gray mixed in. And Neither Party would disclose the cost, but both say there is a return on investment. When we went through the bankruptcy, one of the very first things we did is we changed out the uniforms. Hired a designer, Richard Tyler at the time, and it restored the employees respect and appreciation for what they do in terms of how they present themselves to the public. Thats the power of clothing and where uniform can really be transformative for the experience of the custody the employees themselves feeling empowered, feeling fabulous, feeling cool. Now, lands end is manufacturing the uniforms. Ultimately the fabric is stain resistant, stretchy, antibacterial, posen said one thing he was not going to compromise on was quality. You think about the wear and tear the uniforms have to go through, that was an important feature. So not red, white and blue anymore . Thats a big change. It is. It is a huge change. Think about it, a lot of airlines have red and blue. Thats part of the reason that delta wanted to change it up, stand out. It is dark because of stains and they still wanted it to be regal, but they said it was actually their idea to go with the purple. Very madmen some of them. It is. And he had different thought boards and showed them to us. Some more futuristic, some he used the phrase very madmen, that golden era of flying. And delta employees helped him pick and choose aspects of each to go into the final design. Cool. I fly a lot so plum. Passport plum. Time for trading nation because traders trade better together. Netflix, soaring after reporting rich ross and dennis. The options action, whatever it is you want to look at, netflix, where does it tell you the stock may be going . We know where it has been. Right. And it is tough to give much credibility to options. We were looking at 10 move in the Options Market going into this earnings call. And i think a lot of people expected to be the downside, but it was to the upside at 20 . The one thing i look at is there is currently a large open interest in this stock. Not very well liked by a lot of people. Were still seeing people in buying at the money, the 120 calls today. There is a good amount of Short Covering going on. Short covering going on in the Options Market in the stock. Okay. Before i get to rich, if you had to guess how much of the 19 gain is just Short Covering, and not buyers coming in because they like the story, is there a way to figure that out . Well, i mean, one thing you can do is look at where the stock just opened up. The stock was trading up 10 or 15 right after the number last night. So there is not a whole lot of retail buyers that come in after the market closed. So the professionals are in there buying the stock before the market opened. Hoping to get in front of whatever mistake they had made. Rich ross, how does the chart look . Brian, it looks better today. I can tell you that. And in the shortterm, look, we have this base breakout, base performing for most of the year. That breakout now projects up side to the old highs around 129, 130. But i think what is really interesting for the stock, brian, going forward, is that longer term weekly chart when you zoom out and look at the three yearweekly, were looking at 2015 setup where the stock moved sideways for eight months. Has a pullback to the 100 week and massive breakout off the 100 week which provides the catalyst for trading range breakout and strong move higher. If we were able to surmount that 130 high end resistance of that well defined trading range, you could project another 50 of upside for the stock. Im not telling you it goes there overnight. Just above 130. This stock can go meaningfully higher and we do think that in the short to intermediate term, you get a test of the higher level. Thank you very much. For more trading nation, go to our website, tradingnation. Cnbc. Com. Stock market moving higher today. What will happen tomorrow . Thats what we care about, right . Well preview the report out after the bell. Now the latest from trading nation. Cnbc. Com and a word from our sponsor. When markets get volatile, consider using limiters. They allow you to specify the maximum price youre willing to pay when buying a stock. Additionally, they let you set the minimum price youre willing to accept when selling a stock. But mostly, limiters can help you avoid unpleasant surprises. Welcome back to power lunch. Shares of intel trading higher today. Chip maker getting ready to report latest Quarterly Results after the bell. Stock is up 10 this year. Latest numbers, will they feel it . Lets bring in executive analyst. He has a buy rating on intel. Good to have you here. The company prereleased numbers and they look really good. Do you expect more than that today . I think the focus is going to be on the quality of the earnings. How do the nonpc businesses Like Data Center perform in the quarter. How are they executing on expenses . And then the outlook for q 4. Pc sales we are told are starting to rebound. At the same time they are now a smaller chunk of intels revenue. Is that good or bad that we are seeing sales rebound . They are down from 65 of sales to 50 of sales. So thats good but at 50 of sales it still matters. If you look at the q 3 report on pcs it was actually pretty good. You saw stability across a number of different areas. North america was better. China consumer was better. Enterprise was better. We are seeing what could be a base level of demand for pcs. What about the idea of the return of Sustainable Growth . We talked about this earlier where barclays upgraded saying intel returned to Sustainable Growth. You have it a buy. Convince us. This is a cyclical business but i think you can look at this pc data and say if units are flat from here intel shown the ability to grow the pc business plus you have data center which is now a third of revenues growing some between 10 or 15 a year and then other growth businesses like iot and memory that are growing even faster than that. If you put it together in an environment where pcs are flat you can argue that intel is growing. What do you think about relative valuation . Is this the best buy in the space . Its one of them. What is interesting is you see multiple expansion. Intel is one of the few stocks the multiple hasnt expanded. Today it is trading at 13 times next years earnings which is relatively low when you look at where the group is trading. I think you can argue if business has momentum numbers can move up. On top of that you might be able to get a point or two out of the multiple. Are they staying competitive when they think of the next big thing . They certainly have a presence in those areas but the reality is it is a company that does close to 60 billion a year in revenue so the opportunities are unlikely to move the needle anytime in the near future. Lets get to dominic chu with a market flash. We are watching the Home Builders like horton gaining about 1 to 2 in todays trading. Home Builder Sentiment eased in october only by a couple of points. In september the index surged. The index isnt far off the most recent highs. If you look at Home Construction etf, this fund is ticker itb near the highs of the session up by about a percent. Home builders will be stocks to watch as more key data, they are all slated for release later on this week. We bring it up because Home Builders and businesses around them have been such drivers with what has been happening. A lot have been showing signs of strength. If they are going to weaken it could be a cause for concern. That is why these are worth watching. Thank you very much. Why consumers are staying home. Check please is next. These goofy glasses. Yeah. Well, we gotta hand it to fedex. Theyve helped make our ecommerce so easy, and now were getting all kinds of new customers. I know. Can you believe were getting orders from canada, ireland. This ones going to new zealand. New zealand . Psst. Ah, false alarm. Hey you guys are gonna scare away the deer idiots. Providing Global Access for Small Business. Fedex. Check please. Its not sort of why are consumers staying home . You heard them say that just getting harder or more expensive with restaurants. Dominos is booming. People are sitting home. Netflix is doing well. Video game sales are up. He said business was down. It occurred that one reason could be netflix. Or watching netflix because they are home. There has been talk about peak restaurant, just too many of them. We see takeout only restaurants because labor costs are so high. Speaking, i know we reached peak crews but Richard Branson seems to think so. I have never been on a cruise. I cant go for seven days. You are a free range animal. You cannot be caged. No interest. With 2,000 people you dont know. Branson will make it fun. He said i never did anything in the Hotel Business and now i have the number one hotel. I never did anything in airlines and now have the number one airline. If anybody could get me to cruise branson could. Have you ever been to branson, missouri. Totally different place. Never been there. I like the idea that he likes having an entrepreneur as president but just not trump. Hes not voting because he is british. You are going to vegas, baby. Heading to vegas because of the debate. Live from vegas tomorrow. Will the ride to the airport take as long as the flight . Could be. What am i watching for . Can either one of them move the dial . Can he in particular turn anything around . Is he smarter staying on issues than staying on conspiracies and personal stuff . For sure. He is better when he is focussed in general. He resonates. Thanks so much for watching power lunch. Safe travels. Good luck getting to the airport. That is 90 of the battle. Closing bell starts right now. Welcome to closing bell. Im kelly evans at the new york stock exchange. Fang complex all getting a boost, as well. We will look at whether one of those three stocks could be a good buy ahead of their earnings report. Look at the shares up more than 2 . One of Donald Trumps economic advisers will join us to respond to a story we did yesterday