Transcripts For CNBC Power Lunch 20150520

That is only one hour away and it always happens during our show and it could be a real market mover for you. We begin with Hedge Fund Ties and steve cohen. A year after he turned hedge fund into a privately held Family Office he continues to beat the market. Kateicle we a look at the Trading Floor in stanford, connecticut. Over to you. Thanks so much and the i think the market is a great place to start up. Never before had a Television Camera here on site. Steve himself is here and trading as well at his own trading station. They are having a good year so far. They are up about 8. 5 . Thats good in light of the markets. Last year as well. They beat the market and they had returns north of 13 . A good run in a month or so. What im told at the moment is cautious about the u. S. Stock market. We could see flat kplafr and a slight tick down. A cautious outlook and not a strong view one way or the other. I came from a meeting and the president of the firm who was recently hired along with other senior changes, and he is bringing on a they only change. They hired about 100 new professionals of late and that brings it to more than 900 persons. In terms of what is interesting, they are focused on 12 out of 65 books. They are feeling better about what happened in a while. Finally i had to ask about the picture. There a number of pictures that are unresolved including a case for alleged failure to supervise. He said the past is the past. They are really not focussed on it 94 are they focused on managing outside money. They want to create the best possible firm on a private basis. That is steves goal and they are focussed on that and the values they articulated. Thank you very much. Interesting view inside the trading room. We are watching the banks. Royal bank of scott lent. Slapped with a 5 billion fine in total. Criminal charges here over rigging the currency markets and libor. Here have the latest. Looks like the grand total is 5. 6 billion for the banks you named. Ubs involved in this one as well. Tearing up ubss previous prosecution agreement under the manipulation scandal saying they agreed not to break the law. They didnt do it and they are slapped with a 200 million plus penalty as well. All of this the department of justice indicates there was something wrong with the culture inside the attorney general. Currency traders at several multinarcotic banks formed a group they dubbed the cartel. Its perhaps fitting that they chose the name as it describes the brazenly illegal behavior they were engaged in on a near fiveyear basis. Almost every day for more than five years, traders in this cartel used a private electronic chat room to manipulate the Exchange Rate between euros using coded language to conceal. Showing the emails back and forth, this one upcoming from the department of financial service. This is advice to a member who is considering joining the group to the other. Mess this up and sleep with one eye open at night. Allegedly from a barclays Vice President saying if you aint cheating, you aint trying. The less competition, the better. Also i should say that the sev giving waivers. Although these are criminal charges, the bank will be able to operate. We will bring it to you. We will pick it up from there. Do you have etfs and bond funds . If you do listen up. Regulators are raising questions about how risky the funds can be. Bob pisani is back on the floor what kinds of funds are they talking about . Financial stability and oversight and these are the things you are worried about. Buried deep is etfs. They are exploring and raise lick righty and they have concerns regarding fire sales. There have been years of liquidity issues and etfs is power lunch. We have talked about certain classes that raise some concerns like referage and inverse. Less rick wid markets. Leveraged loans. We tend to avoid it because we are concerned about it. In the overall market pretty healthy. Heres what i think is going on. The real debate and they are looking at nonbank financial ferms. They dont want any part of it. The foc focusing on products. There is a lot of politics going on. Look at the report. In this report they have virtually dozens of Different Things they are concerned about. Including etfs the bond mutual funds and Market Structure and Interest Rate risk and High Frequency trading. This is all in the 150 page report. My bottom line on this is i have no concerns about recommending claims on the etf that use sectors and etfs that we talk about all the time. I dont have concerns about mutual funds. I have concerns about more exotic etfs and they bear examination. Back to you. Bob thank you very much. Lets go to phil. Part of these under pressure is because of a notetaking a look at the potential of delta adding capacity. Delta will be increasing capacity by 2 with the biggest growth coming in the United States. They take a look at shares of american. Why are we looking at shares of americans . They could force u mighted and american to do the same. They are available for the seat mile. Heres doug parker last night on mat money. I think next year with the growth of something, 5 or 6 . Okay, thank you very much. Lets get out to sue herera for a quick news alert. We have news concerning the department of financial service, specifically that benjamin who heads that division is going to be departing the new York Financial services after four years as serving as the agencys first superintendent. He was quite aggressive and pursuing wrongs on wall street. He was the first put in charge after the 2008 financial crisis. He has been in that position for four years. They were creating that position after the aftermath of the 2008 financial crisis. You had him on power lunch and he will depart after four years of heading that agency. Thank you very much. Investments in the u. S. Were not distant just a decade ago. The economic power house pumping a ton of money into the United States now. Michelle has these numbers. Michelle . As a result of that, mandy, thousands and thousands of americans are working for Chinese Companies right here in the United States. We will show you the numbers and the states right after this. Financial noise financial noise financial noise financial noise recapping the day a beg headlines, sales fell more than expected. The Office Supply retailer is merging. Office depot two years after acquiring office max. The shares are down by about 8 10 of 1 . Hormel profits came in above estimates. The food manufacturer did say the turkey business could be significantly challenged due to the bird flu outbreak. Sales forces trending down today about chinas investment in the United States. Where is that money going . There is a lot of it. Michelle Caruso Cabrera has the scoop. Think of this. 80,000 are working for Chinese Companies here in the United States. Thats a huge increase from five years ago when there were less than 15,000 and in 2,000 the number was virtually zero. When you look at the map of the United States, mostly in the midwest there was a lot of manufacturing. North carolina is number one where there were a lot of smith field properties. Three of the biggest states with employment had 20 do with the pitcher by a chinese meat company. When you look at money, its pretty different except for california. Thats at the very top with 5. 9 billion. They had bigger states where you see a lot of Real Estate Investments which are a lot more expensive. Lets talk more about the report with the president of the National Committee on u. S. China relations. You finished in this report. We broke it down based on state, but if i showed this report it is based on Congressional District. Representative by representative. Why . We wanted to bring it down to the lowest political level in the sense that each Congressional District are working for Chinese Companies. In the district, the congressman that these are providing are jobs. This is more meaningful. They think this investment is doing good things for the district. When a lot of people hear you, a lot of them will think Chinese Investment in the United States. What are the motives . So many of them appear to be connected with the government and they read in the paper this is morning. It is predominantly private. 80 of the United States does not have stateowned enterprises, but private companies. We have the political motivation that doesnt seem to be evident at all. It is businessdriven. They look a lot like multinationals that are investing in the United States. Manufacturing and distribution and areas where they think they can one and one make three. When you see the news and they busted a chinese spy ring and it leads to worries and the reason they are investing is to take know how and trade secrets from u. S. Companies. There bad apples in every bushel. Chinese come to steal and others come to steal. I think you do not see these people who are investing are coming to steal american technology. We dont see them closing plants in the United States. Relocating them back to china. Are they trying to develop products in the United States that goes global . Absolutely. Are they investing in the United States . Absolutely. I think its a positive story as opposed to the negative we hear about. Thanks so much for coming on. Tyler and mandy, one point we should make. 80,000 americans being employed by Chinese Companies. 700,000 are employed by japanese. Still relatively small with big investors in the u. S. Good to put that into perspective. Great reporting. Shares of etsy tanking after a big loss. The stock is down more than 30 since going public in midapril. Should they give them another chance or is the stock going lower . The most bearish we found makes his case. Plus coming up, a power pitch start up scrambling things up. All you need is scrambling a couple of eggs. Will the founder show hes a good egg . Now im a little suspect. I would love to see the books on that. Stay tuned to find out. Top to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. 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 and a free 30tablet trial. Dont just visit new york. Visit tripadvisor new york. With millions of reviews and the best hotel prices. Book your next trip at tripadvisor. Com today. This emerald is said to be the largest ever. 38. 51 carats. A little bigger than mandys and expected to bring at least two million. The auction is set for june 2nd. A little bigger . Me thinks quite a lot. Start up is scrambling up the egg game. We gave you the 30 seconds to convince him his start up is the next big thing. I have been in the Food Industry for 15 years and cofounder of clever foodies. We launched a construct scalded scramble. Its a mix of veggies and herbs to go with eggs so you can create dishes and fast scrambled eggs and fritatas and omelettes. You need scramble and a couple of eggs. In the First Six Months of business we have been able to establish relationships with different egg company. Scramble hit the shelves and we have 1200 stores beside the eggs and all super markets. We are on the way to surpass 1 million in revenue for the first year and now own an entirely new category in the dairy section of american super markets. Welcome to todays power pitch. You just saw the pitch. Lets meet the panel. On set with us is a partner at Collaborative Fund that backs seed stage ventures including a company that creates plantbased and eggless food products. Lauren jupiter at accel foods. She served as a board member of exo that makes protein bars out of cricket flower. Celebrity chef rocco has created a personalized weight loss program, coaching organic food system and maleit kit Service Called the delicious by rocco. Paulo, you are in the hot seat. First question goes to you. The hardest thing is getting distribution. Can you tell us about how you go the to 1200 scores so quickly . We initiated conversations with major purveyors in the industry and we have a relationship with egglands best the letting egg brand in north america. We have been lucky enough to use the sales force and we have direct access to the buyers in the right department. One of the Biggest Challenges with the packaged food company is driving trial. I would love to know who your target consumer is and how to get them to purchase the product. Moms are the decision makers. We have been lucky enough that the kids have been embracing the product. In the locations that we are in super markets like publix and price shopper, we have attempted to promote or do any marketing initiatives and the product is already turning. Do you plan to add all natural and nongmo ingredients . We are all natural and we dont use sugar. We are certified gluten free and from a preparation point of view the preparation is pure. Its a foundation of a good meal. We layer flavors so you can detect every ingredient when you eat it. Its fundamental that anybody can get. Whats to prevent competitors and whats the gross market . We have the benefit of being the first movers. We are a new category. We would welcome a competitor because it would give visibility to the segment and increase our valuable position. Profit margins, confidential at the moment but we are in line with the margins in the industry. We are highly scaleable at the moment. Can you walk me through a fivechain and ultimately how much capital you will need in the long run to get to whatever size you want to be down the road. We are selffunded at the moment and can be for a long time. In terms of supply chain, i operate the manufacturer and infrastructure and bring 15 years of experience in food manufacturing. Our product retails between 3. 79 and 4. 99 a yar. What are you going to do with the money . We will be fine for 12 to 18 months. You heard what he had to say. We need to know if the panel is in or out. Im very impressed by the fact that he has gotten to a million and a half self fund and profitable margin structure. On the basis of that and creating a new category i like the venture aspect and i am in. The product doesnt do that to make eggs more convenience and adds a layer to an inconvenient item on a daily basis. Im out. Im a chef and it tastes great which is a huge advantage. I love the fact that you are profitable now, but im suspect and would love to see the books on that. I think you invented a category that could expand and i see multiple product line expansions. I think the fact that you are getting people to cook at home which is really one of the biggest cures to the obesity epidemic. For that fact alone, im in. Two ins and one out. Whats your reaction . Im very happy. I hope i can address your concerns with a solid track record going forward. Thank you very much. And thanks so much to paolo from clever foodies. That is todays power pitch. You in or out on scramble . For more, visit power lunch and i was with the quite disappointed i was out that day because it looks delicious. Right next to the eggs in the aisle. The biggest threat to the Pharma Business. How are they affecting the bottom line there . Plus paulson and ekman and the greatest 2r5ids of all time. You weighed in on your picks. Inside the feds head. The release of the fed minutes. Could be a market mover, folks. At chase, we celebrate Small Businesses every day through programs like mission main street grants. Last years grant recipients are achieving amazing things. Carving a name for myself and creating local jobs. Creating more programs for these little bookworms. Bringing a taste of louisiana to the world. At chase, were proud to support our grant recipients and Small Businesses like yours. So you can take the next big step. We live in a pick and choose world choose choose choose. But at bedtime . Why settle for this . Enter sleep number. Dont miss the memorial day special Edition Mattress with sleepiq technology. Sleepiq tells you how well you slept and what adjustments you can make. You like the bed soft. Hes more hardcore. So your sleep goes from good to great to wow now we can all choose amazing sleep, only at a sleep number store. Save 500 on the memorial day special Edition Mattress with sleepiq technology. Know better sleep with sleep number. Hi, everyone. Im sue he rer a. The Drug Enforcement administration conducting raids on pharmacies and pain clinics as a crack down on prescription pain drug abuse. Thats according to sources that tell nbc news. In al bam a louisiana and mississippi part of a 15month operation by the dea. Hormel foods said the forecast for turkey meat production is for the birds. They told analysts he is skeptical of the industrys ability to hit the goal due to the devastating outbreak of avian flu. Guilt tow a misdemeanor charge and will pay 11. 2 million to end a federal probe linked to a salmonella outbreak according to a plea agreement. The Worlds Largest disney store opened doors in shanghai today. It is 53,000 square feet and the first disney store in china. Shanghai is set to get their own park in the spring of 2016. You are up to date. Thats the news update at this hour. Back to you, ty. Gold prices are up just a little tiny bit. Some of the others moving in other directions. Gold at 1208 an ounce. Silver high by about a 30 of a percent. Copper is flat down a smidge. Up a little bit. About 1 10 of 1 . Platinum about a half percent. To the bond market to the guy i spent part of yesterday with. Rick santelli is tracking the action. The iconic convention, it was great having you in chicago. Listen, when i look at the markets, i write down prices and yields about every 15 minutes since about 9 30. Nothing has changed. Doesnt mean its not trading, but its testament to the notion that the minutes are important. The market seems to have a different timeline on potential tightening than the fed. Look at the interday. Doesnt look that flat. Its scaling. You can see how flat it is and if anything surprising comes out, the dollar will move first and the dollar will move most. The rest will follow. You see the interday when you pair it up. Remember the high yield close going back to early december is still 229 and tens and not that far from that level. The session is idling for the 2 00 eastern minutes. Ricky, thank you very much. A lot of wait ask see approach going on here with the stock fees soaring ahead of the fed minutes that rick was mentioning. Hopefully a fifth day of gains. That would be the firstday winning streak so far in 2015. We are ever so lightly down 21 points to the downside. You never know what the minutes may bring us. Joining us the head of managed investments and cohead of global strategy at the institute, thank you very much for joining us. How market moving do you think these minutes are going to be . The evidence on the one hand employment numbers do well but if you look at the growth rate, its slow and potentially not growing. The tenyear has gone up. In response to global moves, its a bit contradictory and people are guessing as to when the ultimate tightening will take place and does it really matter . They will be a couple of clicks up and thats it or is it a tightening cycle based on greater growth . We have this situation and a drip drip drip. The market is slowly creeping up. Yes, we are at record highs and it feels like we are going sideways when we look at the daily moves. All the volatility and the tripledigit moves. Where do you think the market is going . I think we will continue to move higher. The market is responding to the start up of better data in april and may. You see the initial claims and the jobs numbers. You see the conference boards and leading indicators and even up in march. We just saw Housing Starts number and a Building Permits number that is better than expected. All those things are giving us a forward look that its a lot better. We are looking for higher highs. By the end of the year. So not particularly aggressive. Positive, but not particularly aggressive. Yeah. To the top of that range, its about 6 . If we should see kicking in from the international economy, i think that target could move higher. What about you, david . What would you be doing with strategy from here . We look at a market in the u. S. , up about 9 . The foreign markets could be up between 12 and 15 . We agree that this is a particularly good time for investors to position themselves. The key risk is do the companies deliver earnings that they are supposed to. The reason we are optimistic about growth is because we see europe coming back more than expected. The u. S. Can get the benefit of lower fuel prices and higher consumption towards christmas. The japanese are doing well. The story globally and we think people should invest and lastly when we look at individual stocks and sectors, what we are most interested in is finding stories of the growth and areas like agriculture and health care and innovative technology. You can position a portfolio looking out regardless of what the fed does. Thats a good way of putting this. You like the large cap in general here in the United States. In view of what you think is going to happen with the dollar it had a bit of a direction. What do you think the dollar will do . It will be more flood and not move up the way it has. The dollar move up slowed the large cap stocks and the United States. We have conditions moving ahead and i think generally the dollar is not going to be the issue for and the parts will benefit. We think the consumer stocks should pick up and like industrials particularly. You both like technology. Thank you very much for joining us. Why it is cautious like emerging markets. 3,000 or 4,000 protesters here as they continue the fight for 15 an hour. Now there today specifically taking aim at mcdonalds Business Strategy and specifically a plan to spend 20 billion over the next two years on stock buy backs. That will go to enrich Corporate Executives and hedge funds. Mcdonalds for its part is saying thats part of the turn around strategy and they are drawing attention to the roll and the powerful labor union that played a key behind the scenes role in this campaign for 15 an hour. Back to you, tyler. Thank you very much. To the help of housing in america, a number of people applying for home mortgages fell as Interest Rates fell. Mortgage bankers index down 1. 5 . Applications hedged higher and the average rate on a 30year fixed is right around 4 . Market flash. High dominic. Shares of property and casualty spiking on a reuters report saying it is considering a sale of the Transatlantic Holdings a company that could stlaul at about 6. 5 billion. They have not decided whether or not to sell that unit and no deal is imminent and the usual caveat applies by about 2 o 3 . Mark cuban is not shy about telling us what he thinks. What he said about the gdp and sec is much. Is it the greatest trade of all time . You weighed in to tell us which trades you think belong in the hall of fame. Thats in the second hour of power. Here at td ameritrade, theyre always working. Yup, were constantly making thinkorswim better. Like a custom screener on your desktop, that updates to all your devices. And you can share it with one click. Wow. How do you find the time to do all this . Easy. We combined every birthday and holiday into one celebration. different holidays being shouted back to work, guys i love this times of year. For all the confidence you need. Td ameritrade. You got this. Automotive innovation starts. Right here. With a control pad that can read your handwriting, a widescreen multimedia center, and a headup display for enhanced driver focus. All inside a redesigned cabin of unrivaled style and comfort. The 2015 cclass. At the very touchpoint of performance and innovation. Joinings us at iconic. He is not shy about telling us what he thinks ever. Heres a snippet. Does the economy feel as weak as the numbers from the First Quarter suggested it did . Not from all of my businesses which are a lot of Small Businesses. A lot of shark tank investments. We feel growth whether its at the mavs and selling tickets or watching the nba ticket sales and all the companies. It feels like its growing and having seen the gdp reports before and the. 2 and having everybody feel like they were going backwards, i can see it. It goes to steve where he challenged the authority and realized not only could the number be wrong, but what other numbers do we need to question . Im happy to pick up my buddies at the sec. Because of what they have done every time they screw up they dont catch madoff and enron. There is an overreaction. As a result we have seen the number of Public Companies drop in half over the last 15 years. We have seen only four ipos so far this year. Just think about that. How its calculated and the sec. He thought that the fact that some of those seasonal adjustments may not be exactly right. Thats of concern. It doesnt show up in his businesses right now. When businesses see numbers that are incorrectly low or incorrectly high they can act on that. Absolutely. They can make them feel overly optimistic when its not warranted. Lets talk more about mr. Cuban and the sec. He asked people who were Small Business owners. Whether they felt the sec had made the markets more secure since the big recession of 2008 and 2009. That does not speak well of the confidence they had in the se c c. He is a guy who had a long personal battle. When he calls them id notes and on the basis of personal experience. What he is accusing them of is two important things. There is too much regulation and too many rules getting in the way of business. They are not catching madoff and these big fraughts that come out later on. That has been part of the criticism for years. They have been trying to recover from the damage that they did to them. On friday last week we see this thing involving avon in which somebody was able to get into the secs own system and file documents as if they are planning a take over. All of that totally bogus yet its still in the system. I just checked it a few minutes ago. That sits there and they said their job is not to judge whether the documents are accurate or not, but to register whatever people pump into the system. That generated a lot of criticism. A lot of people are frustrated with that. I can imagine. Mr. Cuban venting that clearly as well. I didnt think he minced his words. He has been on their stick. Thank you very much. Lets get to dominic for a market flash. Another mover is hormel foods near the highest levels earlier than forecast. Better than forecast des tight strong quarterly earnings. The second largest turkey processor warns that they will negatively impact the store business. Some say that that Jenny O Turkey business out of hormel accounts for nearly 1 5 of total sales there. Home depot versus lowes. Amazon versus walmart and kohls versus jcpenney. Who wins . That is ahead in the second hour of power. We are back in two. Verizon say neversettle. Tmobile agrees. Never settle for verizons overpriced gimmicks. Try the uncarrier riskfree for 14 days youll love it, or well pay for you to go back. [ male announcer ] legalzoom has helped start over 1 million businesses. If you have a business idea, we have a personalized legal solution thats right for you. With easy stepbystep guidance, were here to help you turn your dream into a reality. Start your Business Today with legalzoom. [container door opening] what makes it an suv is what you can get into it. [container door closing] what makes it an nx is what you can get out of it. Introducing the firstever lexus nx turbo and hybrid. Once you go beyond utility theres no going back. It is summer in russia. You know what that means. Fun as only the russians can have it. Time for the annual tank biathalon. The winning team going on to represent russia in the national biathalon championship. My idea of fun. Okay. Here are the power points. Jpmorgan and barclays and royal bank of scotland. They agreed to pay a combined fine and a u. S. Investigation into manipulation of foreign currency markets. The numbers show Chinese Companies now employ more than 80,000 people in the United States up from less than 15,000 just five years ago and virtually zero in 2000. Fast footworkers protesting ahead of weekend shareholder meetings seeking a 15 per hour wage. If you missed any of these stories or the other big stories, visit powerlunch. Cnbc. Com. Mortgage applications off throw. 5 as rates moved up. Is the Housing Market headed for another downturn . 63 of you say yes, it is. Rates rise in a rebounding economy and they think that is good for housing. A check on the markets ahead of the fed news. Lets see numbers. At the new york stock exchange, a Conference Call on the sthap ran aground as it left yesterday. The ship is unharmed and has been cleared by the authorities to move on the way as it is doing to boston on schedule for fridays arrival. There is no change to bookings and no impact on the business. The stock is down today. That has more to do with the fact that they have completed a secondary offering worth over 1 billion. More than 8 of the market. Brian, over to you. Thank you very much. We are minutes away from breaking news out of the color reserve. We will get a glimpse as to what happened when they released the get out of the top of the hour. Stocks going head to head to help you sort through. The greatest trade of all time. Let us know where you think it might be. First, tyler and mandy, back to you. It is threatening multibillion drugs. Live at j and js pharmaceutical meeting. Over to you. Thank you so much. Here they are laying out the strategy for the growth and saying they plan to file for approval of the new drugs with the ability to potentially bring in more than a billion dollars in revenue. Thats important because over the next years, up to a third of the Pharma Business could face similar competition. This is a hume toyed arthritis drug or more here in the u. S. There is debate as to when that could hit the market here in the u. S. Between 2016 and 2018. We have heard of pills like lipitor and these drugs are made from living cells. They are called that because they are not identical. To call them biosimilars. There a ton of these right now. Three three drugs like that and others from amgen. The first has been approved here in thes, but not yet on the market. It is tied up in legal paddles. To talk more about this with us is mike weinstein. They will have the patent expire in late 2018. Will key see biosimilar prior to that. There is a challenge to that that is being played out to change the patents and potential approval that you talked about sometime in the next year or two. That got delayed two months ago. There is a real question when that will product be approve and when will we see the competition. When is your expectation of seeing the biosimilar . Exactly. The question will come down to the label discussions and the court activity. That will come down to the one question. At that point it will issue part of fizer and they decide to launch at risk when they get fda approval. We are assuming and we think it will not. They will wait to play out the past which will be later in 2018. We dont think it will be an issue until late 2018 but thats part of the risk that people are discussing today and are worried about. And are they prepared to handle this . J and j for those of you who are not familiar with what they are, they are a big driver of the performances and the stock is the pharmaceutical business. It is 43 of sales and 55 of praft profits. It has done exceptionally well. 16 brs last year even if you backed out of a drug last year it was growing in that range. We think it can continue over the next three to four years. They did a good job of convincing us that they are developing a line line that can help us manage through the challenges as we go out. Everybody talks about them having more than 30 billion in cash. Do you think they will do a big acquisition in pharma . They have done a fantastic job better on the pharma side and the consumer. That can be anything from large acquisitions, but more in licensing compounds and buying smaller companies. They havent needed to do a large deal to get the growth that we are getting. I think they can continue to do the big deal. Thank you so much for joining us. Absolutely. We will look at the markets and a quick check on the markets. My favorite fast food price. Minutes coming up. Over to you. I will take it and give it back to steveliesman. Breaking news to kickoff the show. Thanks very much. Many saw a hike as unlikely. They didnt rule it out, but the data was not expected to support or provide the confidence. There were a few you can imagine supporting a june rate hike. In a story we have been talking about here most rejected including an explicit warning inging of the rate hike. They said they are datadependent and they will have to make the judgment over the state of the economy. The First Quarter weakness was mostly or largely transitoriy. Another story we have been talking about, the trend of weak First Quarters in the data for an extended period of time. In the last First Quarter, they claimed severe Winter Weather and the west coast and most to resume at a moderate case. High Consumer Confidence and rates could spike and concerns about internals on the market. One is an increased roles of trades and traders. Number two decreasing inventories. These are stories and when the fed hikes, there could be a spike in rates. Other westerns with the oil prices and the stronger dollar could Linger Longer than they expect. That was talked about quite a bit depressing exports. Back to you with the majority. Rejecting a june rate hike saying its unlikely and only a few supporting it. Before we get to the guest, as i listen to your analysis and doing key word searches the Federal Reserve told us that they are going to raise rates soon. We are talking about inflation getting back to 2 . Wage inflation is on the way up. They are using the t word for transitoriy for the First Quarter. To me, they are looking at this. The Federal Reserve saying get ready. An Interest Rate increase is coming. Agree or disagree . I think its right and the market expects it. Its one for the market and generally expect it to be september or later. If the wage is there and the job data turns, all of those things could put them back on the table. Before we get to you, i did my word search to get an idea as to how much they are talking about. They use the word patient five times in the minutes of the march meeting. They use the word patient zero times. No mentions of the word patient. Thats a guess egg. Instant Market Reaction here. Bob and rick we want to look at the Market Reaction and take a look at the financials. You are not seeing much reaction in either. Lets start with you. Saying they are all transitoriy issues. We have another month to show that its not and some things have been helping them. Like the Housing Starts and the sales have not been helpful overall. You have more optimism on the labor market front. Pay thut up the Regional Bank and not Much Movement there in the overall markets. The key thing down here is when they are going to raise rates. Most people down here feel that they are in the 1 and done camp. One rate hike 25 basis points and many people feel they are going to issue an explicit statement that they will only do it that one time and maybe even a formal part of the fed statement. Back to you. Thanks so much. Lets go to rick santelli. We are seeing a little bit of reaction now in the bond market. Dollar index without a doubt. Talk about a uturn and down then up and where did that come from . The euro went up and down and its now lower than it was. It was flattening. A certain move the low guy on the curve. It only moved up a basis point from 59 to 60 but that is surprising and a bit counter intuitive. About two basis points on 30s. All in all, the treasury market is like a political presser. No movement and all foreign exchange. Thank you very much. Steve liesman is still with us. I went out there and it seems like they are queueing us up. Am i wrong . I very much disagree with you. This reminds me of the dizzyenal tone they have taken with the economy as of late. We see concerns with the strength of the dollar and undermining the growth. The weakness in the First Quarter would carry over into the second quarter. If anything this is going to redirect the focus back to the weakness that has been ignored as of late. I think this justifies remaining on hold and at the earliest, the latter part of 2015. As we contended, holding the fed on the sidelines until 2016. Can i jump in . I think lindsay might be misreading something. It depends on where the bar is. I dont think its very high. I am agreeing with you on this. Maybe jerry will break the tie here. The issue is i dont think we have to resume Something Like average growth in that range, that will be one of a rate hike and it wont be hard for the data to get the fed over the bar. I think it is pretty clear where the bar has been set. They told us that the bar is 23 to 27. Even with a stagnant second quarter, we will have to see above 3. 5 in the third and fourth quarter. I dont see the catalyst. Lets go to jerry. That was the most polite disagreement ever which i appreciate. Thank you very much. I dont disagree. Saying we are wiping it off. Whats your read on the minutes . Is there a chance that agreeing with lindsay, they feed like they need to send out a floater. We are kind of we dont have a strong opinion and positions in bonds. The markets have been discounting a much slower and more consistent move up in rates over the next six months. Whether the bond market preempts that because of a sustained move in oil prices or inflation, its clear to us that there is expectation for it. If you look at the charts they havent broken out yet. They are restrained mostly because there was no expectation for any material move here and its not likely to see one throughout the summer. They may have been restrained on the financials, but if you look at them they have been market leaders. What is the right path to the financials given there is an expectation that rates are going to rise and perhaps the market is saying that there was an expectation that perhaps june was still on the table. That hasnt been fully discounted in the market and the stocks have reflected some small portion of it but if you really had that conviction that you saw a substantial rate increase coming, those stocks would all be up further than they have been. They are casing this. I want to get back to the disagreement with lindsay. I think its important for them to figure this out for themselves. I would maintain if this economy does 2, 2. 5 average to little growth over the rest of the year, i think it will be enough for the fed to hike. I just dont see we need this. It would be wonderful to have and even baked into the expectations, but i dont think we need to have above average or above trend growth if we just stop right here and get back to where we were its going to be enough to get the First Quarter point. There is going to have to be a lot of other improvement with 2. 5 growth over the remaining nine months of the year. We will have to see them confident that they are reverting back to the 2 annual rate target as well as further improvement in the target. From the feds point of view its not just about that number. We have to see underlying improvement and a plethora of sectors to justify a change in policy. All right guys. We will leave it there. A great debate saying no this is how i feel. We appreciate that point of view. We have no problem being told we are wrong. Lets set the table for the rest of the hour. We are headed to the mall. A tournament of retail rivals. Should you buy home depot or lowes. A big booking battle between the Major Airlines all done with alliteration and Discount Travel sites versus the airlines and the days must see video. A crane falls into a tiger enclosure at a zoo. What happens next is hard to believe. The tiger style is no match. Female announcer through monday get up to four years interestfree financing or save up to 400 on beautyrest and posturepedic. Even get up to four years interestfree financing on Serta Icomfort and tempurpedic. But this special financing offer ends memorial day at sleep train. Bulldog mattress discounters Memorial Day Sale ends monday . Oh boy a queen size serta mattress and box spring set for just 397. Mattress discounters has the Largest Selection of memory Foam Mattresses under one roof well ill be. Up to 300 off tempurpedic breeze. And wow get up to four years interestfree financing on the entire tempurpedic cloud collection better hurry the Memorial Day Sale ends monday. Mattress discounters. The zoo in china, a crane fell into a tiger enclosure and four tigers checked out the bird and two were interested in fighting. The crane did not flinch. It fought off every tiger strike. Zookeepers rescued the bird or maybe rescued the tigers. Also big name retailers locked in a battle for markety is premacy. Welcome to the power lunch. Lets kickoff with the big Home Improvement companies. Tigers didnt win. They just ran around. Home depot is chasing lowes. They are going through the situation where they put expectations out there and cant meet them. On top of that they dont have the pro business. Thats whats driving the average ticket and comps. The spread between home depot and lowes. Am i wrong in saying these are fungible . I dont care which i went to. They are the same. You will say they are not. One is orange and one is blue. There was a time when lowes was the go to place. They said they cant live with that and they stepped up the game. They won with pros which is what she just said. They never got there. They helps them build their business. You are both picking home depot . Its a better business. There you go. Battle number two. Amazon versus walmart where you do disagree. You are going with walmart here. The numbers were not good. The numbers were not good. The business is getting better. They are doing a great job with retailing and make that work. They have the u. S. Stores and they are getting traffic to pick up and once they start to rise things start to work. They have the problem of being the u. S. Economy and they are not doing all that well. That is a problem. They are definitely improving the way they run the business day in and day out. They are investing into online and smaller stores. Thats the right strategy. Because i read your email, i know you are going to try to ditch out of this. I would choose amazon here. If you look at walmart, i agree. They are doing all the right things. That doesnt mean you want to own the stock. They are spending, spending spending to gain traction online and they have less than 3 of sales. Half of the customers are prime amazon customers. Good luck spending yourself into trying to get online. You would have selected target if you could. Exactly. Target. The last one, jcpenney versus kohls. A tough sell on both. Neither . I will say neither again. She picked none of the above and picked both. It worked out well. You can have mine. You can invest in both names. Kohls was the surprise stock of the year. It has been terrible lately. I cant figure out the volatility. What do you make of the business . In the shortterm kohls is bringing in more brands of products. The program for loyaltiy is going to work. They will have four or five more good quarters and jc penny is doing the right things right now. They are going to have a good 2015 as well. Longer term, they have that between them. Thats a big problem. Both will perform what they expect. Last word . They had one good comp. The trend for q1 went down. Loyalty, yawn. Beauty, yawn. Nothing revolutionary here. At the multiple its trading at better choices out there. Right now he likes what kohls is doing. You were very polite as well. Up next, the booking battles. The growing turbulence between the airlines and the travel website. Talk about milking profits. Check out dean foods. That is up 17 . This is not a random reference. We are speaking with the ceo coming up. Blap airlines stobs hitting major turbulence. Some concern over deltas plan to boost capacity over the years thought of it as delta increases capacity. The others followed. You can see all the major carriers deep in the red right now. Thats the continual concern that airlines will be undisciplined as the spending is spending once again. The airlines should be disciplined. They act like naughty children. The seats are too small. A big fight is brewing between the travel websites and delta airlines. Its all over where the Airline Posted schedule and fare information. Delta removed that data from over a dozen travel websites such as expedia and priceline claiming that delta is cutting them and users off from the data. Joining us now with two sides, i guess. Who do we believe . If they are restricting data, that is factual. What the issue is here is whether or not delta is doing something wrong. The travel Technology Association is basically a trade group for all of that. Saying there is no transparency and at the end of the day, you will pay more for the airfares. Believe it or not, delta is running the business the way it wants to which is you buy the tickets and everything that goes with it through us or through certain websites the ones that we want to work with thats how delta wants to run the business. I am perflexed by the complaint because at the end of the day, delta is do whatever it wants to do. I dont hear them explaining. Why do they have a right to the information. They would sell on their own websites because they wont have to pay commissions and they can add ones and so forth. Whats interesting is its a push back from the industry. We know that delta is doing this because they put out a press release. In a case of private data that delta can do what it likes. This is an antitrust issue. At the moment these airlines disseminate the data through the industry and the schedules and the airfares. If they remove that there is an antitrust implication. Thats where they are headed. Phil references a study they have done. You could see as a result of four airlines controlling, they increase the market share. A 30 prize in the tickets. Its a push back and trying to get the dot on board. All right, phil. Good debate. I thought you were krooiming in. A frequent traveler as well. Who knows where it will end up. Airlines please make the seats bigger. We are all go to the gym. We are getting bigger as a people. Longer and wider and taller and the seats are getting smaller. Some of us are getting wider. I am. It happens. You get older. A bullish day for oil. Crude up while production falls. Thats exactly right. We are bucking the trend and moving higher. You are right. This is all a production story. Not necessarily an inventory story, but look at the numbers when we come back on power lunch. Its part adrenaline and part adventure. Its part geek and part chic. Its part relaxation and part exhilaration. Its part sports car and part suv. And the best part . The 2015 gla. Its 100 mercedesbenz. By the time Police Arrive on a crime scene they could have little to go on. A vague description. A single piece of evidence. A partial plate number. With an app from ibm officers can now access over a billion police documents to find hidden connections and identify potential suspects. Ibm analytics helps one hundred thousand officers work smarter every day. The ayatollah will not allow the inspectors to enter the military sites or give access under Nuclear Agreement with the world powers. He spoke at the academy of Iranian Revolutionary guards. Officials wouldnt say what the mission is or how long it will last, but they did say they will conduct nasarelated experiments. Egg prices are climbing due to the deaths of millions of hens from the midwest. A dozen eggs 58 higher than a month ago. Prices have been rising about 5 cents a day over the past week. Tonight a late night legend says goodbye. He will host the let show for the last time. Bill murray was on hand for last nights show. He burst out of a giant. There he goes. He began his late night career in nbc at 1982 moving to cbs in 1993. Thats your news update at this hour. Back to you. So after that i was walking down brought way around 5 time 45 and i missed it boy a block. Bill murray after the taping walked down the street embracing random people. And sing give peace a chance. I missed it by a block. Only in new york. I know. Thank you very much. See you next hour. Stocks are higher and we are down when the fed came out. We are up 30 points or so. Its not a big day for the dow, but we were down. Still even up 30 points and that puts us at a new record high. 18,345. Another day and another record for stocks. Oil production falls and oil prices rise. Those two things not a coincidence. Inventory decreased, but that production number moving from 9. 374 to 9. 262. This is a decline in production. The market wants to see that. Whats interesting about it is that the decline came from alaska and other regions and didnt come from the crackers. We will need to watch them closely and see if the trends continue to decline. The market found they were closing under 59 a barrel. Despite the fact that we have the stronger dollar. We have losses yesterday and we have buying mentality. We are trading and. Lets look at etsy. The stock is down 22 after a weak First Quarter report and more than 40 off the highs from when the stock started trading in midapril. The managing director, great to have you with us. You had a great call and downgraded to an under performer. If investors listened to you, they avoided much of the pain. At this point what do you see ahead . Your concern about not only the counterfeit goods issue, but creeping into the listings. I think a couple of weeks ago they had a befored goods. Some seller buying 1,000 for five sends on ali ba ba and etsy. Preventing top to right and trademark infringement. They also invested more marketing and i think the disappointment yesterday had more to do with that. The fact that they are investing on marketing and margins are getting depressed and revenue is decelerating anyway. Longterm, thats not a sustainable formula for growth. What are is the floor at 13 . Is it perhaps is there value in the business itself even though it has a problem with counterfeit goods creeping in or is it the notion that perhaps it could be a take out target at this point . Its one of the least likely products go get by in my space. Ebay and amazon would be the buyers. Have all the buyers and most of the sellers already. They dont need to buy it. The way out for etsy is to go back to baskets and what made them special. The hand made and the vintage and the e thos they had around social responsibility. They strayed away with that. It is frustrating the seller and diluting their brand of bauers. Is that something to come . They showed significant volume from 39 and 28 . Just over the past quarter. Clearly the growth is over the past couple of years. They still have the issues if they did go back to basics. Going to leave it there. Gill has a 13 price on the stock, the lowest on the street. Brian . Time now, melissa for street talk where we dig out Analyst Research for the viewers and listeners. Lets go. First stock, a Little Company known as comcast. Barclays reinstating our Parent Company as the top pick. They note the size and scale and its the only true media play and the ebitda is 60 higher than disney. Are they cutting cords . Nope. They are watching more and video than any generation. That is suppressing. Take a look at the cable stocks in general off of the sudden link deals. The second stock here walmart again. They are getting more bearish. They have gone under performing and cutting the target to 72 from 78 on the retailerss miss. The lowered forecast. The operating trends were not encouraging in two segments. Grocery and general merchandise. They think the stock will trade at a 10 discount with the s p. Target same store sales up 2. 3 and it doesnt look like they are stealing sales. Is it amazon . Maybe apple and maybe the Housing Market and a car market. I have no idea. Who knows. Walmart does take the lumps they announced 250,000 veterans over the next seven years. Stock number three, aaron s warts upgradeing for a neutral, splunk has a 24 upside. The positive is predicated on the steps they are taking to improve adoption. They could win the space. They hired the former cio as the chief tech officer. You think of big data there has to be a way of going through it. They identify the technology as a favorite. The fourth stock and fx and macro concerns, they are sticking with the overweight rating cutting the estimates. Well positioned for rebound when it stops offering perpetual licenses. The upside is to 81 about 40 upside from yesterdays close. You find the bold calls and thats why we love you. The average target price is just under 70 a share. 69. 80. Lending club the ticker lc san franciscobased. Morgan stanley raising with overweight to equal. They go up and eye recent ipo in december. You want to watch that because its getting closer at this point. Were wrap up street talk one more day down. It is time for trading nation. Today we will focus on the banks. Big news this morning. Citigroup, Jpmorgan Chase and settling an Interest Rate rigging case. 5. 8 billion. More bad headlines and does it make banks bat . And we are looking at the charts. You work for a big bank. Does it make bad investments . A lot is priced in. The small banks have outperformed. Thats the difference between the twoyear or 10year and twoyear treasury. Bat things for the big banks. What im hearing from you before we get to carter we all knew the case was out there. It was not shocked. We knew this headline risk was there. And a lot of ways. How does it look . Its a stealth outperformer on february 2nd in 1980 we are up about 7 if and if banks kept up, whats important is if one looked at the index that is dominated by monies, we have broken out from the range we have been in. They have broken out and the kre and theyll do the same. A good area to be overweight. The number one performing bank is bank of the ozarks. It may have been bought out, but Texas Capital and bank shares are doing extremely well. Larry and carter we appreciate the insight. For more into the website, nfl commissioner Roger Goodell is holding a News Conference in san francisco. He is commenting on the patriotss deflate gate. Any headlines and cross, we are going to bring those to you. Deflategate. Coming up an exclusive interview from dean foods. That stock is up 20 . Can it keep going while dealing with the drought. Carl icahn made billions, but is it the best trait ever . The latest expressing interest and making a deal with timewarner cable dealing with comcast joining the likes of charter. Take a look at the shares up 5. 25 . Back over to you. Thank you. Hosting the annual farm to market conference in new york city, one of the companies in attendance. Greg tanner taking time from the conference to join us for another exclusive. Great to have you with us. Thanks. Its great to be here. What helped in the is declining raw milk cost and they were not passing ought the savings. Keeping the margins up. Going forward through the rest of the year. I think raw milk costs are going to stay benign. Our belief is that the Global Market continues to outperform and they stay up for about 1. 7 up. The numbers that we received yesterday. So we think its going to stay about where its at right now. Probably creep up a little bit in the second half of the year. There is a notion that there was a secular head wind facing the company in part that people are not eating breakfast in and people are drinking less and less milk and looking at alternatives like a soy or almond milk. What do you see in terms of declines for milk productions and is it do you think that there is a secular change going on in the industry . I dont know that there is a secular change but we are seeing demographic changes that have driven a lot of this. The breakfast occasion at home is just no longer what it used to be. Very few families are sitting down and having breakfast and having cereal and milk. I think we are seeing some of that, but i think we are also seeing it shift more towards on the go. So we are seeing more single serve. We have a lot of people who continue to look at alternative beverages as a way of getting their protein. We believe that we are one of the most costeffective deliveries of protein out there. When you compare us to some of the alternative beverages, you get eight grams of protein in a single serving of milk and many of the others you will get one gram of protein in a single serving. We believe we are a great alternative. We are running out of time. You guys are sitting on an unbelievably good distribution platform. You can go out everywhere and that maybe there is an opportunity you are missing by not neveraging the platform to other company who is would pay you to use it. Is that something you explored or are exploring . I think its something that we continue to explore. Any time that we can get the scale and they need a toopt that allows them to increase, we interested in a costeffective manner. Take care. Thank you for the opportunity. Sure thing. In 1919 the red sox traded the Young Babe Ruth through the new york yankees for 100,000. And that makes it one of the greatest traits ever. And sticking with baseball wait until you see where this home run landed. Crushed it. There is an ancient rhythm. [ ] that flows through all things. Through rocky spires. [ ] and oceans swell. [ ] the endless. Stillness of green. [ ] and in the restless depths of human hearts. [ ] the voice of the wild within. With xfinity from comcast you can manage your account anytime, anywhere on any device. Just sign into my account to pay bills manage Service Appointments and find answers to your questions. You can even check your connection status on your phone. Now its easier than ever to manage your account. Get started at xfinity. Com myaccount if you missed it look again at this home run by Pedro Alvarez of the pitts bhurg pirates. It literally hit it out of the park. It went into a boat that was parked on the Allegheny River behind a giant walkway behind the stadium. A passer bihop ererby hopped on and grabbed a souvenir. Thats trespassing. Ad lib stock is what is says on apple. Apple is up 45 cents to 130. 53. Its up 1. 6 for the week. Its not doing much today or this week or the last couple of months but it has been a huge moneymaker for millions of investors, perhaps none as much as carl icahn. Uncle carl has made about 3 billion in apple since he began buying the stock nearly two years ago. Not a bad profit. That got us thinking about some of the best trades ever and dominic chu has been reading some of your tweets and idea and is here with the contenders. This is not a trade by by icahn. Its an investment. Hes held it for a pretty long time at this point. Our Editorial Team combed through a lot of the different trades through over the years and put together a handful of them that have struck at least a cord in term of the overall news they generated. Carl icahn, that long apple stake, 3. 4 billion. Thats the estimate. Hes held it for a couple of years now. Yes, one of those hash tag greatest trades ever. Take a look at this one, 3. 4 billion. It compares to another guy out there who made a huge bet. John paulson betting against the Housing Market the subprime mortgage market. Estimates are that back before the financial crisis began his firm reaped in an estimated 15 billion from that particular short of the Housing Market overall. Two big ones there. Take a look at george soros. He broke the bank of england in 1992 betting against the british pond. His firm made an estimated 1 billion. That was back in 1992 dollars. A big trade there. David tepper over at appaloosa, at the tail end of the financial crisis on its way back up again. An estimated 7. 5 billion there in terms of profits. Lets take a look at the tweets you put out there. Many of you tweeted about those greatest trades. Take a look at this from m3rmatt. Easy. Sggp that made ackman famous. It was in bankruptcy it restructured shareholders made a big profit. Another greatest trade, facebook instagram. Not just hedge fund. Companies bought instagram for a billion dollar. Some would argue its worth a lot more than that today. That corporate front resonate as well. This one here comes from from from lisa from lisaglick926. I think disney buying marvel was a great trade. Tack that on to a couple others you have yourself a nice portfolio content. Herschel walker to the vikings for draft choices and players. Those arent trades. Youre buying something. A trade implies youre swapping out for Something Else leaving something on the table because youre going all in. John paulson, going in all on mortgages. Any purchase is a trade. Youre giving up cash. When you buy dean foods milk at the trade . Im giving money for milk because i value the milk. I agree with melissa. Anything you transact is a trade if its cash for Something Else. No no what are you traying instagram for . What are they trading theyre trading stock. Yes absolutely. They gave up cash gives you nothing. Cash gives you value. Right, melissa. Theres no return. Anyway. All right, yes. We can argue this. Thanks tom. Is buying a company considered a trade or when i hear greatest trade i think i skip Something Else to do this. I dont know. Maybe im wrong. Same thing as buying a stock, brian. Yes, its investing, not trading. Does your car get more or less than 20 miles per gallon . The cnbc realtime Exchange Market snapshot is sponsored by interactive brokers. Dont just visit new york. Visit tripadvisor new york. With millions of reviews and the best hotel prices. Book your next trip at tripadvisor. Com today. Automotive innovation starts. Right here. With a control pad that can read your handwriting, a widescreen multimedia center, and a headup display for enhanced driver focus. All inside a redesigned cabin of unrivaled style and comfort. The 2015 cclass. At the very touchpoint of performance and innovation. That compares to the current gas tax of 30 cents a gallon. Brian . Yes. So i mean i have about 100 things to say on this topic. We have ten seconds left in the show. Its the right thing to do right. Heres the thing. Any electric car buyer ever said im going to buy an electric car to avoid the gas tax . I dont think so. Exactly. We agree. I know. Its crazy. We disagreed on the last thing. Well agree that i was right. I disagree you were right. Its true. Thats where the disagreement is. Whats that country song its just you and me and we just disagree. Thats us. Salesforce. Com out with earnings. Cramer has an exclusive with the ceo. We look forward to the show. And closing bell starts right now. Welcome to the closing bell, everybody. Im kelly evans here at the new york stock exchange. Im Bill Griffeth back where i belong as well. Y a. Y the dow turning positive today. The blue chip index is back on track to close at a new alltime high again, post its first fiveday win streak this year. Meanwhile, the s p also right around its alltime highs at this hour. As you know anything can happen in the final hour of trading. You want to stick aro