Ms. Nooyi, telling the story about her mothers response when she came home with a big promotion. Let me explain something to you. You might be president of pepsico, but when you enter this house, youre the wife, youre the daughter, the daughterinlaw, the mother, nobody else can take that place, so leave that damn crown in the garage. Leave the crown in the garage. It gets better, more brutal truth from pepsis ceo coming up this hour. First, sue, to you. Its great to have you back, ty. We really missed you. Glad to be back. We had a dip, but were still not far from historical highs. Right now the dow is down 61 points on the trading session. Bob pisani and seema mody standing by on the drop, but first to dominic chu, whos reporting on value picks. Perhaps, sue, remember with earnings season fast approaches, profits will be in focus, and what you pay is one of the main metrics that a lot of professionals use to find value. So we went hundred dollarsing for a lot of value plays that are trading at multiples, price to earnings ratios at a discount to where they have traded over the past five years. Think of them as stocks on sale from a valuation perspective. Petsmart is one of them. Jana partner is already taking a stake there, wants them to unlock shareholder value, but right now it trades at 15 times earnings it normal trades, at least for the past five years at 18 times earnings. That means its trading at a 20 discount, so if youre looking for a stock play, with stocks at record highs, there is a value pick. Also another one here on the oil side of things. Energy, his trades at eight times earnings it normally trades at around 13, 14 times earnings. That means its trading 40 below where it normal does have a valuation perspective. One more here, just to give our portfolio a mix. Hyatt hotels on the Consumer Discretionary side. They trade at 39 sometimes earnings, but over the last five years, they traded as high as around 75 on average, so that means theyre trading at a nearly 50 discount to historical valuations, at least for five years. Anyway, sue, if youre looking for value stocks at a multiple with stocks at record highs, sometimes some professions use metrics and price to earnings ratios is one of them. Earnings season of course is right upon us. Back over to you. Thank you very much, dom. Bob pisani is standing next to me. What do you make of that . Its a good point. Growth has outperformed value for a number of years. Those are growth names, by definition people are expecting growth out of them. The names that dom mentioned that are lagged, because the earnings are not quite up to snuff. Its buy low, sell high. Thats why you are interested in value. Hopefully. Weve got a day, very familiar today. Small caps are underperforming again. Remember back in march and april the small biotech stocks, thats happens again today. The s p only down half that much. The reason is smallcam biotech names are underperforming again. The reason that the transportation indec. Is weeker, is the airlines are down today. But thats been a choppy group for a while. Whats yow performing . Anything that pays different. Telecom. The biggest performer of the year is utilities. Reits also to the up side. I would be more concerned if i saw some darling in the group lie flouk tech. Theyre in the fracking group, a lot of the chemicals in the business, Everybody Loves this stock, small cap, but i dont see any deterioration, the volume isnt hef y. Its not rolling over. These are the kinds of names that people watch to see in small caps are deteriorating. Well see if it worsens. Volume is very light too in the market today. Well see that. Can also cause volatility. Thank you, bob. Uptown to seema. Good afternoon, sue. After three consecutive weeks of gains, some traders coming back to work after what was a holiday weekend, reevaluating their risk reward scenarios, especi especially when it comes to tech, which has been a volatile sector as of late. I will point out, you were just talking about the russell 200, trading at lower after hiding a record high last week, biotech weighing on the smallcap index. There are a couple tech assistant joined. First go pro, shares rebounding. Options begin trading today. Mobile iron. Goldman sachs initiating coverage, given it a buy rating. Talking about the byod bring your own device trend. King digital, the stock now trading above its ipo price, Analysts Expecting candy crush soda, which is expected to launch later this year as a cat li for king shares o that note, take a look at some of the other comeback names. King digit at, yelp, groupon, all up double digits. Sue . Thank you very much, seema. Nobel prizewinning economist telling cnbc this morning the very strong market prices are in a sense a symptom of the weak economy, not a symptom we are about to of a strong recovery to our real economy. Also issuing a warning today, jeffrey saut while i do not think any pullback will be severe, i do think we are vulnerable to a 10 to 12 decline in weeks ahead. Hugh johnson is here, and art hogan is back with us. Hugh, im going to start with you. I know youve a bit carb. You are invested certainly in stocks, but what do you make of the comments. I know youre looking for a bit of a pullback. Yeah, i think hes right. If hes saying, as i think he is saying, that the stock market is not at a level that we would call a level of speculation characterized by the emotion of euphoria, hes really saying kind of the same thing that janet yellen has been saying, which is effectively saying this, the current level of Interest Rates, which is historically pretty low still has been associated with a much higher valuation for the stock market or higher price earnings ratios. What hes simply saying is were not at a speculative level, hes not worried about valuation. Thats not to say, sue, that if the market is not somewhat pricey or overvalued. Thats what i would argue, yes its overvalued, but certainly not at a speculative dimension. Would you agree with that . General . How would you view it . Yeah, its interesting, sue, if we went back 153 trading days ago and looked at the Market Crossing 16,000 in november of last year, we had the exact same argument. The market has gotten ahead of main street and stocks are only up because of low Interest Rates. The problem with that thought process is its almost up almost the exact basis as earnings are up. Its tracked the earnings growth. Well see as we get into next weeks earnings ceasing if in fact the estimates are in line and if we start looking at the multiat that time at 2015 saying were trading at a 15 multiple, we may be attractively valued here. The tricky part of trying to make a call here is who is the investor youre speaking to . The fast money crowd and should you try to time the market . Thats one thing. If youre a longterm investor and we think there will be a pullback, that may not require action at this juncture. You have tower careful with calling stops. The main treatment investor may get scared out of the market for something he probably should be riding out. So hugh, what have you added to the portfolio, taken away from the portfolio since we last talked . Weve added in the energy, first of all the sectors that we really like right now are quite frankly not too much of them, in, technology and health care. So weve added national oil well, nvidia in the technology sector, believe it or not weve also added apple. Were in the sectors that are performing well on a relative basis. I would add to what art is saying, hes absolutely right. They shouldnt be trying to call shortterm swings in the market, nobody can do that, but you might stay optimistic on the market or prospects for the market, but at the same time build a little defense into your portfolio, so weve added those names, and we look at some of the dividend payers also very favorably. Art, what do you like at this juncture . We showed some of the names. You sure did. We like the domestic emp names, gulfport and matador are two of our favorites. We think Interest Rates will go higher time in 2015. I mean, theyre also seeing a significant pickup on a quarter over quarter basis, so i think financials and energy, especially emp names would probably be the way to go there. Gentlemen, thank you so much. Good to see you, as always. All right. To dominic chu for a market flash. It might be a down day for stocks overall, but the only two sectors up today are the high paying dividend ones, like bob pisani said, utilities and Telecom Stocks are leading the way hires. Utilities has claimed the position as the s p Top Performing sector for the year. Up about a quarter of a percent so far. Leading the way higher is exloan, scanna and am run, also Telecom Stocks in the green as well, up toward session highs, the big ones, at t, windstream, frontier and of course verizon, all big names leading those two sectors higher. Back over to you, tyler. Dominic, thank you very much. Cnbcs alpha conference is about ten days away, july 16th. I will be there, talking to some of the biggest money players in the world. Kate kelly will be there, too. Shes reporting on how some of the Biggest Hedge Fund managers in the world have fareed so far this year and what they are eyeing now. Theyre kind of like the yankees, big payroll playing. 500 ball or worse, right . I think thats a fair criticism, tyler. I would say halfway through this year, it has been tough to deliver alpha so far in 2014, though we dont have end of june numbers. The average hedge fund was just up 2 in may, even as the s p was up 4 , now with the s p and the dow recently hitting highs, the anecdotal suggests that the hedge funds still arent doing better. Some of the more respected stock investors like third point and greenlight are about on par with the s p at this point. Just a handful of and pickers having done better, that includes bill ackman, making it easily one of the top, if not the top performer, and Larry Robbins is up about 11 through last week. Both investors appear to have down well with specific stock picks and perhaps fortunate timing as well. And smart bets on names like flicks tronnics humana and robinson. Going forward Hedge Fund Managers seem divided on what to expect, some say the vix being at seven years low is a head fake, where others think the Economic Data argues for a more sustained rally. No doubt well hear more color, perhaps investment ideas at delivering alpha. Its always a fun day. If youd like to go, you can still get tickets, log on to deliveringalpha. Com for that. Weve been talking about a variety of things, including californias water crisis. There you see the information. Now the dry weather is hitting a new target. Jane wells is live in l. A. The target is, jane . Pot, the price of pot coming down, the cost of growing it going up. Now people who grow and raise and fish legal things are being impacted. Pot to water talk, when we come back. The lakers didnt win the championship this year, but they did come in number one on another important list. See who else scored. More power lunch coming up. Will the lakers get carmelo . Thats what we want to know, here in new york, today. Ugh. Heartburn. Did someone say burn . Try alka seltzer reliefchews. They work just as fast and taste better than tums smoothies assorted fruit. Mmm. Amazing. Yeah, i get that a lot. Alka seltzer heartburn reliefchews. Enjoy the relief. In india we have 400 Million People who dont have electricity and i just figured that its time i do something about it. What were doing right now, along with ibm, is to actually transfer data through a satellite from our wind farms directly onto the cloud. I think we could create a far more efficient system across the whole network where we could actually draw down different kinds of energy based on when its needed by the consumer. A smarter Energy System is made with the ibm cloud. Welcome back to power lunch. Shares of rocket fuel are rocketing, but theyre being held lower by coverage initiation over at wells fargo. They say its a market perform or neutral rating. They have attached a price target, according to those analysts. Market fuel is but theres increasing competition and changing advertising landscapes that could be a headwind. Its been a rough year for this stock. Dom, thank you very much. The states first wave of recreational pot shops is set to open for big this week. About two dozens stores got the official go ahead this morning. Theyll begin selling tomorrow. By law all products must be packaged, labeled, and unlike colorado, there are no loose buds allowed. This buds not for you. No edible foods allowed, and no sampling or smoking the merchandise in the stores is permitted. Expect high prices, tight supplies for the time being until more stores are green lighted. Meanwhile, in los angeles, cannabis growers decided to dispense with dispenseiaries all together, instead selling their crops direct to consumers in the first ever marijuana farmers market. K5rd holders gout cutrate items to edible foods like cannabislaced waffles. Everything on hand was organic. Also in california another big issue for marijuana growers is water. It takes a lot of water to grow a plant. Jane wells is in l. A. For us. Jane . According to some analysts they average 6 gallons a day. However, you look at the video, legal or otherwise, it is often called the states largest cash crop. Whats we call the Emerald Triangle in northern california, the industry which sustains local economies isnt very sustainable atself. It hogs the water and theres a severe drought. If you look at this, the yellow pins show all the areas designated as marijuana grows by Law Enforcement through satellite maniagery, production which they say has doubled in five years and now an industry which is usually tolerated because of the the money it brings to local economy is being criticized for the damage being done to the environment. Water use for marijuana could consume essentially all of the stream flow in that watershed. What we are seeing today, when we go out and observe some streams that theyre already going dry. So its significant, for sure. Ive heard there were people who have actually shut down their grow operations, bought water trucks and have changed from growing to supplies water to the other growers. So thats almost another industry of bringing water in. Reporter now, there is some talk that maybe the instrument should be regulated so it brought into the fold. That seems unlikely in this environment despite the damage to the environment, even if government was willing to do that, guys, some growers dont want to be regulated. Back to you. Understandably so, perhaps. Jane, thank you very much. To basketball, the l. A. Lakers had their worst season in years in 201314, but reportedly the most Profitable Team in the nba. According to los angeles times, a memo distributed to teams sos the lakers number 1, earning about 158 million in profit before tax and revenue sharing for the most recent season. The Chicago Bulls came in second. The l. A. Clippers at number 7. Who was last, you ask . The brooklyn nets. They had a loss of about 51 million. Some dramatic video here, a very close call at a spanish airport over the weekend between these two planes, were going to show you the rest of the video played out next. And a tesla chase, phil lebeau is behind the wheels. You talk about dramatic video, wait until you see the video of a tesla stolen in los angeles, a highspeed chase and the way ittents with the tesla split in two. Collection is here. During the cadillac summers best event, lease this all new 2014 cts for around 459 a month or purchase with 0 apr and make this the summer of style. E financial noise financial noise financial noise financial noise hard it can be. How. To breathe with copd . It can feel like this. Copd includes chronic bronchitis and emphysema. Spiriva is a oncedaily inhaled. Copd maintenance treatment. That helps open my airways for a full 24 hours. You know, spiriva helps me breathe easier. Spiriva handihaler tiotropium bromide inhalation powder does not replace rescue inhalers for sudden symptoms. Tell your doctor if you have kidney problems, glaucoma, trouble urinating, or an enlarged prostate. These may worsen with spiriva. Discuss all medicines you take, even eye drops. Stop taking spiriva and seek immediate medical help if your breathing suddenly worsens, your throat or tongue swells,. You can get hives, vision changes or eye pain, or problems passing urine. Other side effects include dry mouth and constipation. Nothing can reverse copd. Spiriva helps me breathe better. Sfx blowing sound. Does breathing with copd. Weigh you down . Dont wait ask your doctor about spiriva handihaler. Welcome back to power lunch. Check out shares of tidewater moving lower after Morgan Stanley downgrades it, citing softening demand. Also cut its price target to 50 from a prior 59. Off session lows, but still down about 5 . Dom, thank you very much. Tang a look at this video, at barcelonas airport, two planes narrowly mys colliding an airbus a340 was taxiing across the path of a boeing. The boeing jet flying from russia carried out an emergency goaround procedure before it manage to do land safely, thank goods in, just a few moments late. A montana Train Derailment caused beaus fuselages to tumble into the river. The shipment was en route from a plant in wichita, kansas, to the boeings final Assembly Plant in washington state. No world yesterday on what caused the derailment. Thankfully, no one was injured. A highspeed chase over the weekend has an intriguing end. Have you seen this video yet . When you see it youll be saying, wait a second, it looks like the car was split in half. The car on fire is one half of a tesla model s. It was stolen from a dealership, a highspeed chase ensued, then there was a crash after the chase. Tesla, weve been in touch with them, they are hoping to have a chance to look at the car. First of all, they want to find out the circumstances behind the theft as to why it split in half in the fire. Titanium plates have been under all vehicles. They made that change about a year, year and a half ago. Yes, the stock is down almost 2. 5 , but a lot of people are saying theres so many circumstances that we dont know about this accident, guys, that its premature for people to say it could have some implications to say for the future of tesla. Keep in mind this is a very volatile stock. It moves on the slightest news. That vi