Transcripts For CNBC Power Lunch 20151008

The truth on behalf of the families for the four dead americans. I should not be a distraction from that, and thats part of the decision as well. Thank you very much. Theres been some rumors that a letter that was put out by no. Can you put to rest those right now . No. Come on. Who do you think [ inaudible ]. Huh . Who do you think i think the conference should be able to decide. Thank you all very much. Okay. That was Kevin Mccarthy listening right there just a few moments after he shocked a lot of people pulling out of the race for House Speaker. He said of the party, i think were going to be stronger. He admitted that the vote was going to be tough, said he didnt want to win with 220 votes, would rather win with a much larger majority and also commented on the comments he made regarding the Benghazi Committee saying that wasnt helpful to the overall process. Were sort of left in limbo as to where the vote for House Speaker goes from here. The stock market clearly didnt like the news when mccarthy surprised everybody by pulling out of the race. It sold off. But the folks from power lunch will pick up that story and that show begins right now. Scott, thank you very much. Along with mandy drury. Welcome, everybody, to power lunch. The action this hour really down in washington as Kevin Mccarthy drops out of the race for House Speaker. Our chief washington correspondent john harwood is here with the latest. Scott just used a very interesting phrase, and that was that mr. Mccarthy said he got out because he wants the party to be united. Is this a unitable party right now, john . It is not, and whats happening is the party is not has one faction which is the majority of the party that is conservative but recognizes the limits of governance, the limits of the political power that the Republican Party in the house and nationally has. You have a group of people, a minority of the caucus, enough to deny somebody 218 votes for speaker, Kevin Mccarthy, that does not recognize those limits and this is a problem john boehner has dealt with since 2011 when he became the speaker and you had members who were not willing to raise the debt limit even though he and his Leadership Team were trying to get them to do that, and wee seen this ov weve seen this over and over again. The party does not now have anyone with the capacity as of this moment to unite the party and bring together both factions. Paul ryan has said hes not going to seek the speakership, doesnt want the job, and were going to find out over the next couple weeks who does. I want to bring in brian gardner, a Washington Research analyst, to join in this conversation. Brian, welcome. And for both john and you, here is my question, is a party that cant unite behind a leader really a party, brian . Its a good question. Look, republicans and democrats have had fissures in their parties before. This is far more public and messy than its been in the past, so the next speaker will have to find a way to unit his party or her party to become an effective governing body. Right now its herding cats is what it is and its not in a very effective Political Party to answer your question. Brian, do you think theres a possibility that john boehner will stay on a little longer than expected until this is all sorted out . Yeah, that certainly is a possibility. You know, john harwood was just mentioning paul ryans name. I know congressman ryan has said no in the past. I think theres going to be a lot of pressure brought to bear on him because after mccarthy this was kind of keeping mccarthy in place for a few days. There was no obvious alternative to Kevin Mccarthy, so i think paul ryans name will come back into it but certainly it is possible for boehner to stay. But i dont think he wants to stay too long because, you know, hes really a lame duck at this point. Hes walking for the door. Hes going to have limited ability to pressure members since they know he is now leaving, so his lame duck status doesnt let him stay on more than a handful of days. I cant see him being there for a month, two months beyond what hes announced. John, who else would be on the short list, which looks like a long list, of potentials. I would not think chaffetz or webster would emerge from this process as speaker. Here are names different republicans have floated with me over the last few minutes. One Jeb Hensarling of texas, expert on financial services. He took himself out of the leadership race before. Youve got somebody like peter roscum from illinois. Somebody who could span the divide within the party. Tom cole of oklahoma, somebody former executive director of the Republican National committee. Someone who was aligned with john boehner. Trey gowdy of South Carolina although one of his colleagues said trey gowdy intends to leave the congress at the end of 2016. I want to give some historical context. Obviously, this is not the first time weve had parties split into factions that cant reconcile. The last time you had a split like this or comparable to this in any way was early in the reagan term. You had an ungainly Democratic Coalition of liberals and conservatives. The conservatives broke off, helped Ronald Reagan pass his program, and ultimately helped make the republicans the Majority Party in president ial politics for a generation but theyre not the Majority Party anymore, and the danger or republicans is that you have a block of moderates split off and put democrats in a stronger position nationally than they are today. Which of the names john harwood just mentioned do you think would be potentially the best candidates here . Would thereby any other names you would throw in the ring . I think trey gowdy is probably the best. What republicans are saying they want is a strategist plus the face of the party, a speaker, and really when you go down the list that john just outlined, there are very few leaders there who have been tested in the national spotlight. The lone exception is paul ryan. Hes been through a president ial campaign. Hes raised a ton of money for republicans around the country along with Kevin Mccarthy, so he has the National Stature and gravitas and knows how to message better than anybody else on that list did. You know, everybody else on that list is flawed, and i think they would all have trouble, the same problems that Kevin Mccarthy did. But let me ask john, as we wrap here, would paul ryan have the kind of ideological purity that the conference seems to be questing for . Well, a couple things. First of all, this split within the Republican Party right now isnt really ideological. The party is pretty ideologically homogeneous. Its over intensity, temperament, tactics. Paul ryan is unquestionably conservative, and hes conservative enough for the Republican Caucus. He has a more practical side and the question is whether or not the practical side would be acceptable to the conservative faction. I think it would be. He showed it when he made that budget deal with patty murray, but paul ryan plainly himself is skeptical of the ability to do that job because he said he doesnt want it. Thank you very much. Brian, john, we appreciate it, and, boy, does this tumult in the Republican Party tee up an amazing next debate among the republican president ial candidates and, of course, it is on october 28th. Cant wait. University of colorado boulder, and it is your money, your vote right here on cnbc. Same day, by the way, as the fed meeting. What else can we throw in there . Okay. A news alert in the bond market right now. 30year notes up for auction today. Rick santelli has been watching demand. What grade would you give it, professor Rick Santelli . The best of breed, it beats out 3s, beats out 10s, and it gets an a as in apple. Lets go through it. 13 billion reopened 30s is really its a 29 year 10 month instrument, two months ago was the original issuance. 2. 914 was the yield at auction. Priced right and there was a big concession because weve been seeing prices drop and yields rise all session on the long end of the curve. 2. 46 bid to cover. Solid. 56. 4 indirects. Second best going back to 06. The first best being the last months auction. And if we look at indirects im sorry, those were indirects. Direct are 15. 5, also a very solid number considering 12 is a 10 auction average. So a, markets selling off a bit for a variety of reasons, so 58 billion in supply, done. Mandy, tyler, back to you. Best of breed. Okay. Thank you very much, rick. Volkswagens north america ceo getting grilled on capitol hill today over the automakers diesel deception, and boy, oh, boy, a lot of fireworks. Very tense session. Eamon javers, give us the highlights. Mandy a very tough day for a lot of people up here on capitol hill today, including michael horn of volkswagen. He was up here on capitol hill, but you could feel the frustration from lawmakers who were pushing him for specific answers about what volkswagen did when they did it, and what he knew about it. He was vague but he was informed about the potential problem in spring of 2014. He said volkswagen is pulling back on the request for certification of its 2016 model year volkswagen. It will leave a lot of volkswagen dealers without new product to sell to customers even if they can find customers who would be willing to buy them at this point. He did give guidance on how long he thinks this process might take. Take a listen. You are certain the remedy will end up being a multiyear approach . Yes. If you look alone at 430,000 cars and the repairs might take five to ten hours even in order to fix this technical fixes, and if you look at your recall history in this market also with nhtsa, then these actions take, you know, one, two years. Guys, he was asked how much money he thinks vox wag sentence going to have to pony up here when its all said and done. Not a clear answer to that very as well. Thats going to be one of the questions on the minds of investors. Eamon javers reporting from washington. The imf warning latin americas economy will probably go into recession this year for the First Time Since the end of the Global Financial crisis a few years back. Major meeting taking place right now in peru and jeff cutmore is live in lima. Hi, jeff. Hi, tyler. The message as always from the imf here, dont move Interest Rates too soon. And its directed at the Federal Reserve and theyre saying there is too much leverage in corporate emerging market companies, and that is a major risk here, and fif the fed move too quickly on Interest Rates there may be a crisis that leads to a new financial crisis 2. 0. So that is the overarching story from the imf if peru. But as always at these meetings you get the opportunity to talk to individuals that can give you a lead on other stories, and i had the chance to catch up with the head of the euro group in brussels and i asked him about this volkswagen story and how its escalating after michael horns testimony, and he said there is no issue with the quality of german goods, but if companies in europe have done what volkswagen has done, then they need to, quote, for a dutchman he went into anglosaxon, bloody well sort it out. So some interesting lines here in peru from the head of the euro group. Well bring more of that story to you later on in the day. Back to you. All right, geoff. Geoff cutmore reporting live from lima at this hour. Inside the feds head. The minutes of the last fomc meeting set to be released. The meeting where a lot of people thought policymakers would hike fast. Not so fast. Youre watching cnbc, first in business worldwide. Estment mana, we believe active management can protect capital long term. Active management can tap global insights. Active management can seek to outperform. Thats the power of active management. [get up to 48 monthsw interestfree financing on tempurpedic. Save 300 on beautyrest and posturepedic. Or choose 300 in free gifts with stearns foster. The triple choice sale ends soon at sleep train. From and the people whought you underwhelbrought youet speeds. Temperamental satellite television. Introducing. Underwhelming internet speeds and temperamental television. In one. Welcome to the moment no ones been waiting for. The Fastest Internet and the best tv experience is already here with x1. Only from xfinity. Lets go straight to julia boar zin for a news alert. Some news on netflix. Theyre raising their price of their standard two stream option standard option by a dollar a month. It will cost 9. 99 per month up from 8. 99. This is only for new customers. Anyone who is already subscribing to netflix will not see any rise to their monthly bill. But this is going to be a way that netflix will generate additional revenue and also the stock is moving higher on the news. Thank you very much, julia boorstin. Netflix is up by nearly 1 . As for the overall markets, were looking a little soggy right now with the nasdaq the biggest loser percentagewise down by 0. 8 . Mild losses for the dow and s p. Lets get more on whats happening with the action at the nyse with mary thompson. The markets have really been focused on the event that happens on the event that happens at 2 00 p. M. Eastern. We have modest losses for the dow and the s p. The nasdaq taking the biggest hit. Quick check of what some of the traders will be watching when the fed releases the minutes. They want to know why was there a close call last time the fed met. Keep in mind a couple of the fed the voting members said it was a close call as to whether or not to raise Interest Rates. What were the concerns, if any, about the International Markets and what kind of rate of job growth would the fed feel comfortable with in raising Interest Rates. So, again, traders focused on that event happens at 2 00 eastern time. Back to you. Thank you very much for that, mary thompson. Bond ties and bill gross suing pimco. Brian sullivan is here with new details. Well, earlier i got off the phone with bill gross attorney. Thank you for taking the call. To get into why they filed this lawsuit, breach of contract is what they allege but theres heady allegations in this suit, guys. And you will forgive me, i will read a couple quotes directly from the lawsuit. When they talk about why, why they filed this lawsuit, this is the first line of the complaint, quote, driven by a lust for power, greed, and a desire to improve their own financial position and reputation of investors, a cabal of pimco managing directors plotted to drive bill gross out of pimco effectively for money because lets move on. Here is why, im going to summarize this, by getting gross out, pimco had a huge bonus pool. By forcing gross out, the other executives involved in this alleged conspiracy is really the right word to use, i have read the complaint, they then get a bigger pool of money for themselves because gross would take a lot for the bonus. With him gone they get more to split amongst themselves. So really the reason here comes down to money. Okay. So hes suing for breach of contract and whats constructive termination exactly . Okay. Constructive termination is a fancy way of saying you fired me. You fired me. You may be saying i quit which is what they did say at the time, but in truth it was effectively a termination in breach of contract. Call it what you want, im sure some of the viewers, this has happened to them. Basically its like tyler, thanks for quitting. I didnt quit. Yes, you did. Have a nice day. Yeah. Thats basically what theyre alleging and well have patty glazer, gross attorney will call into the 2 00 show so well get more from her. The complaint sounds less like a complaint and more like a screen play. I will publish later today i hope sort of the dummys guide to the lawsuit because its big and im going through it. It literally involves burner cell phones, people leaking stories to the press. It slams Mohamed Elerian basically saying he only did well at harvard because everything was going up and he didnt know how to manage risk. Using words like cabal, conspiracy. I mean, this is a very i dont want to use the word juicy, but there is theyre alleging basically a vast can spour conspiracy to force bill out. Hes already a billionaire he said any proceeds will go to charity so its a matter of priss. And pride. Hes pissed off. Am i allowed to say that. This is cable. Bill, if youre out there call in, although your lawyer may not want you to. He was not an employee of pimco. This was his company. He founded it. He and two other guys founded this inside of other company. This was his baby. It wasnt like he was a random employee. Basically he says a group of managing directors sort of fooled their Parent Company into thinking ned a deal to move gross to the side but then sprung a trap, thats his word, and got him out. In his current janus unconstrained bond fund, what do i think about this . Is this distracting him from what he should be doing . I dont know. He can obviously the viewers know i have a relationship with bill. I have known bill for a long time. Hes an incredibly intelligent guy. Im sure he can perform he can probably manage a lot of things at once. It has to be a distraction but i dont think i dont know if its going to hurt his performance but i dont see why. Bill is angry and hes putting it in papery and im going to try to get this published, this dummys guide to the lawsuit because its big and it kind ever reads like a spy novel. And his lawyer is going to call into the next hour. Fantastic. Well look forward to it. Thank you for the details. A new exchange to trade bitcoins but will wall street buy in. Well speak to the winklevoss brothers after this. One of them is named tyler. The handsome one. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is, can your business deliver . Welcome back to power lunch, everybody. Im tyler mathisen. Ma amazon launching a website to go head to head against etsy. It will feature handcrafted goods. General motor slightly up despite recalling nearly 32,000 suvs in the u. S. The recall will address a manufacturing defect that faucas the wind field wiper motor to overheat and potentially melt or even catch fire. Shares of sony lower after it announced plans to sell its half of sony atv music publishing. The publishing estimated to be valued at about 2 billion according to reports. Mandy . Thanks, ty. Today a new exchange begins trading the Virtual Currency bitcoin. Gemini trust is different from the many sites on the internet where bitcoin has usually traded. It received a license, only the second trust charter issued to bitcoin related exchanges. So how does it work . Our own seema mody joins us now with cameron and tyler winklevoss, could founders of gem ini trust. Thank you for having us. Why should i come to your exchange and how do i use it . Sure. So basically were licensed and regulated as a trust company, so we have basically the highest regulatory policies and capitalization requirements, so that should give comfort to customers. Were also a fiduciary so we have to have an obligation to keep the interest of customers first and foremost, and as far as trading goes its like buying a stock on e trade. A lot of people have the collapse of another bitcoin exchange. Were regulated by the same people that regulate your bank or other top tier Financial Institutions but we built with a security mentality from first day one with Security Experts from google wallet, microsoft, and people from two sigma, so peop people who have a lot of experience in security. I think thats going to make the difference. How do you make sure the cd underbelly, those affiliated with the silk road dont use your exchange. We have a robust policy that is antimoney laundering and know your customer. We check peoples identity, verify them, authenticate them and also check them against watch list and terrorist and known persons lists. Cameron, what are you expecting demand to be like because bitcoin the currency is down about 22 so far this year. It hasnt been waning trade. I think a lot of that is due to the fact there hasnt been licensed onramps into bitcoin and i think gemini will be a catalyst and change a lot of that. What were seeing is a lot of the Market Participants such as institutions, hedge funds, traders, market makers, theyre all lining up and were on board with them as we speak. Were watching the deposits flow in at a rapid pace and a lot of these people were unwilling to are you bitcoin exclusively. We didnt put bit in the name. Right now were bitcoin but were totally open and agnostic and open to the idea of having other cryptocurrencies as we see the demand grow. Right now were a spot u. S. Dollar exchange but were looking to expand. What about quimenliquidity . We have a dialogue going on with Institution Market makers in the current bitcoin market but also in nonbitcoin markets and so bringing those players in will provide the liquidity for the marked. Do you still own Facebook Stock . We dont comment on that. What you i do make of what Mark Zuckerberg has been doing over the last six months, his leadership . I havent looked super closely at it. Certainly hes proven to be quite a capable leader, and i think that facebook is an Amazing Company and he probably deserves a lot of credit for that. Thank you for coming. Thank you for having us. Gold prices closing right now retreating from a twoweek high as china came back from a weeklong holiday and took some profits. Silver pulling back from a 3 1 2 month high. Copper, palladium, platinum, there you see them, now you dont. Palladium and platinum both higher. Copper and silver both a little bit lower. Johnny ive late theest apple insider to come out swinging against the new steve jobs movie which hits theaters tomorrow, here he is speaking at the vanity fair summit last night. This is a sort of a primal fear of mine. This touches quite deep i think for me in that how you are defined and how you are portrayed can be hijacked by people with agendas that are very different from your close family and from your friends. Were celebratincelebrating, we remembering steves life, and at the same time beautifully choreographed is the release of a movie, and i dont recognize this person at all. Very interesting. Inside the feds head, minutes of the last fomc meeting set to be released. The meeting where a lot of people thought policymakers would hike rates. That comes up at the top of the hour. Could be a really market mover. Stocks are basically steady ahead of it with slight declines for the nasdaq there. Thank you for calling. Well be with you shortly. Yeah right. Xerox Predictive Analytics help companies provide a better and faster customer experience. Hello mr. Kent. Can i rebook your flight . Im here Customer Care can work better. With xerox. Wait im here mr. Kent . gasp shark diving xerox personalized employee portals help Companies Make benefits simple and accessible. From anywhere. Hula dancing . Cliff jumping Human Resources can work better. With xerox. Awe believe active management can protect capital long term. Active management can tap global insights. Active management can take calculated risks. Active management can seek to outperform. Because active Investment Management isnt reactive. Its active. Thats the power of active management. Hello, everyone. Im sue herera and here is your cnbc news update for this hour. Republican Kevin Mccarthy has dropped out of the race to be the next speaker of the house. He said the gop needs a fresh face to unite the party. He will continue as majority leader. As a result, the election to choose the next top leader in the chamber has postponed. The people charged with keeping america safe say lone wolf terrorists are a bigger threat to Homeland Security than terrorism groups like isis and al qaeda. The heads of the fbi, Homeland Security, and the National Terrorism center testifying today before a Senate Security committee. Belarusian author svetlana alex. O, have. Her writings about women who fought at the front in world wor 2 are a monument to suffering and courage in our time. Marvel is doubling down on ant man. The studio owned by disney announcing it was adding a sequel to the film calling it ant man and the wasp. It will hit theaters in july of 2018. Its the first time a marvel movie will include the name of a female character in the title, which is something its been criticized for missing in the past. That is the cnbc news update this hour. Back to you, ty. Thanks very much, sue. Lets check in on technology and the stocks thereabouts with Courtney Reagan at nasdaq. Good afternoon to you. Technology really lagging the broader indices today as it has been all morning. The markets digesting a possible mega deal between dell and emc and that is part of whats weighing on the markets. Volatility in the biotech space down 2. 1 . It was down as much as 3 so weve come back a bit in the biotech group. The internet names under significant pressure. Look at shares of ebay down 7 falling on some data from channel adviser suggesting september was sluggish for sales for ebay including others like amazon. Amazon shares are down just less than 3 at this point coming back just a little bit. Also launching a handmade marketplace today. That a threat to etsys primary business function and shares of etsy are under pressure because of that news, down by almost 6. 5 . And last but not least, take a look at shares of go pro, down 7 . A note out of the Cleveland Research group again with some more cautious comments. Keep in mind go pro shares are down more than 27 just this month, down another 7 today. Tyler, back to you. Courtney, thank you very much. Lets go to seema mody now for a quick market flash. Lets take a look at netflix. Shares are riding higher on that news that the company is raising the price of its most popular streaming plan. The stock was down 1. 5 just before the news broke. Shares are now 2 higher, and keep in mind up 125 yeartodate. Mandy . We just mentioned it, a bombshell out of washington, as Kevin Maccarthy drops out of th race for House Speaker. What kind of impact will uncertainty about washington and the fed have on the markets. Joining us now a eric showenstein and michael cajino president and Portfolio Manager at permanent portfolio funds. Gentlemen, thank you very much for joining us. Those fed minutes will be coming out in about 20 minutes time from now. Eric, what do you think were going to learn that could potentially move the markets . I think one of the things is probably the most important is learning a little bit more about why things didnt move in september. There had been so much buildup as to trying to get a rate increase in september. Frankly from our perspective we think its probably long overdue to start normalization. The fact it didnt happen is probably a stern for the markets and us aing a lot of volatility were seeing. I think answering that question and answering concerns about what the fed is seeing in emerging markets, those are the things people will be really parsing through the statement to learn. You know, michael, we always hear that the u. S. Is doing so much better than the rest of the world. Ill grant them that, but at the same time is it a possibility that the u. S. Economy is losing momentum just as the fed is trying to hike rates and this could be dangerous . Oh, absolutely, mandy, and i think thats been an underreported and under considered risk by verse. Theres been a general theory the u. S. Can be fine in ice lags and our economy will do good regardless of what the rest of the world is doing. I think were starting to see data points calling that theory into question. From our standpoint weve never really believed that. Were integrated. Were one of three broad prongs in the americas, europe, and asia in emerging markets that we all need to grow to be successful, and the u. S. Does not have enough growth, enough Dynamic Growth to be a driver on its own. I think it is a risk, and i think we are going to see that continue to affect the u. S. Economy. Why do you like commodities, michael . Because commodities are so tied into Global Growth, growth out of china, growth out of the u. S. , demand from all of those economies. Well, we believe that theyre a significant component of a persons overall wealth strategy, number one. Secondly, valuation being a primary concern. Some of these things are so undervalued, so oversold, theyre almost trading at bankruptcy prices. We dont think that story in the long term is stainable. The world will need niece xhthe commodities. We may be early but were longer term investors and we think finding these stories now is a good thing to do long term. What specific standard of care stories are you finding, eric . For us its similar to what michael was talking about. Its a global story, its companies that have Strong Financial strength and advantages in overseas market as well as domestic markets, so you look at a company like beck and dickinson and syringes and needles market, accenture which is helping companies in the Business Services arena to make sure they can continue to grow in a quality way. Even some other companies we like domestically like at jx which works in the offprice retailing world. There are still growth opportunities. Its just a matter of understanding what youre looking for as an investor. We like quality, and we like the idea of Global Growth of being still a driver. And you will the companies you just mentioned are higher yeartodate except for beckton dickinson. Thank you for joining us. You can go to powerlunch. Cnbc. Com to see erics strategy for emerging markets. Over to you, ty. All right, mandy. Retails revolving door. Four new ceos at the helms as we head into the Holiday Season. What will it do to the Retail Stocks . There are four of them right there all in the green. Thats still ahead plus the city in todays powerhouse is home to the countrys largest reservoir. 17 of the 20 biggest u. S. Hotels are located here. And a marriage license costs 60 here. Can you name that city . The great beauty of owning a property is that you can create wealth through capital appreciation, and this has been denied to many South Africans for generations. This is an opportunity to right that wrong. The idea was to bring capital into the Affordable Housing space in south africa, with a fund that offers families of modest income safe and good accommodation. Citi got involved very early on and showed an enormous commitment. And that gave other investors confidence. Citis really unique, because they bring deep understanding of whats happening in africa. I really believe we only live once, and so you need to take an idea that you have and go for it. You have the opportunity to say, ive been part of the creation of over 27,000 units of housing, and to replicate this across the entire african continent. Welcome back to power lunch. Im mandy drury and here are the stock headlines at this hour. Fast food edition. Several major shareholders have filed to share up to 26 Million Common Shares of shake shack. The company will not receive any proceeds from the sale and the shares are down by over 2 . Sorry, 6 . Suntrust has begun coverage on mcdonalds with a buy rating noting the companys new ceo has a track record of successful organizational turnarounds. The stock is up by half a percent and suntrust also rating chip potle a buy. The stock there is up by just over 1 . Lets get to sue herera with a news alert. Thank you very much, mandy. This is in response to bill gross suing pimco for 200 million. Pimco responding by saying, quote, this lawsuit has no merit and our legal team will be responding in court in due course. Our focus remains on our clients and their investment portfolios. So once again pimco is saying the lawsuit has no merit, the legal team will be responding in court in due course and focus remains on our clients and investment portfolios. We expect the attorney for mr. Gross to appear along with Brian Sullivan in the next hour of power lunch to explain some of the factors behind this litigation. Time now for the power house. 41 million visitors a year. Where . Las vegas, baby. With us is cynthia silver of century 21. Lets check out some las vegas stats. The median sale price there about 220 grand. Inventory just over 8,000 homes, and properties are listed on the market for an average of 60 days. First listing is at 8145 begonia blush drive. Taxes 1,200, 3 bedrooms, 2. 5 baths and just under 2,000 square feet of living space. Some of the things that make the home unique is it has a very large great room open concept on the main level, spacious kitchen with tons of cabinets. Also a double door deep pantry and a bonus storage area in the garage. The well appointed master on the second level, two good sized secondary bedrooms and a computer nook. Whats even better about this home besides the price is that this is a lennar all included home. You move in, the blinds are in place, ceiling fans, garage door opener, all the appliances are included. So it truly is a turnkey brand new home for that First Time Buy buyer. This is a brand new place. Brand new. Lets move to number two. 6748 bristle falls street. 382,000. Taxes a whopping 1,500 a month. You have no idea, cynthia. Four beds, three baths, 2,600 square feet of living space. This isnt a brand new home, but it may as well be. It was built in 2015, and i will tell you that while it has a number of luxury upgrades, including some upgraded flooring, quartz counter, and a huge master, whats even better about this home is the rooftop deck which features 360 degree views of the entire las vegas valley, so you have both mountain and city views. Wow. Exactly. Nice. Isnt that awesome. Directly below it is a party loft with a built in area with bar, that kind of thing, so its beautiful for entertaining, and, again, its almost brand new. Im loving it. Lets go to the powerhouse of the week. Its a the 9612 University Ridge avenue. Comparably modest, 50 504,000, taxes 2,450. I pay that a month. This is a big one, cynthia. It is. And its also brand new luxury home in a gated community. This is north creek, also by lennar. This home is 4,156 for the main house. It also includes a onebedroom, one bath with a living room, a laundry room, a kitchen. Its got access to the garage and its own front door. Additionally its got a main floor master. There are three laundry rooms in this home. One is in the master bedroom walkin closet. You have a second one on the second level thats massive, and then, of course, the con see that has its own laundry room. This kitchen is well appointed with professional grade appliances as you can see by the photos. Beautiful builtin appliances, granite counters. The whole nine yards. Its unbelievable this is a luxury home in a gated community for only 121 a square foot. Brand new. Incredible. Ill be on the next flight, cynthia. Thank you. Im looking for you. Thank you very much. Thank you. Cynthia, century 21. All that space. All of us in new york are literally droolg. This is todays celebrity houses. Michael jordans chicago estate and its back on the market, folks. Listed for a cool 14. 855 million. It adds up to 23 which is jordans jersey number from the chicago bulls. The private residence has nine bedrooms, 17 bathrooms, and an Indoor Basketball Court naturally, and a 15car heated garage. Oh, my gosh. Look at that. Holy cats. I know. Holy smokes. Anyway, we are finally winning the war on zombies. Okay, in housing anyway. The number of zombie foreclosures, vacant homes stuck in the foreclosure process and not yet repossessed by the bank is down. What does it mean for the broader Housing Market . Well talk about that and as we head out, this is a look at the sectors today. Energy currently the biggest winner. Health care is the biggest loser as we speak, but were back in two. Dont go away. Hard. Wow, that was random. Random . No its all about understanding patterns like the mail guy at 3 12 every day or jerry, getting dumped every third tuesday. This happens every third tuesday. We have Pattern Recognition Technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. For all the confidence you need. Td ameritrade. You got this. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Im a gas service my nrepresentative. N. Ive been with pg e nine years. As an employee of pg e you always put your best foot forward to provide reliable and safe service and be able to help the community. We always have the safety of our customers and the community in mind. My family is in oakland, my wifes family is in oakland so this is home to us. Being able to work in the community that i grew up in, customers feel like friends, neighbors and it makes it a little bit more special. Together, were building a better california. Welcome back to power lunch. Im mandy drury. Here are this hours power points. The minutes of the latest fed meeting set to be released at the top of the hour, so less than ten minutes. It could be a market mover, folks. Stocks steady ahead of it. No big bets being made. Also netflix was down but shares are spiking up 2 with them raising the price of their most popular streaming plan. And pimco following back against bill gross saying the lawsuit has no legal merit. In the meantime, market flash. Polly com shares hitting a four month high up 16 . Shares are getting a boost as Elliott Management discloses a 6. 6 stake in poly com and urges the company to consider a emergencier with mi tel networks on light volume. Polycom has decided not to comment on the filing. The fed minutes from the last meeting are due out at the top of the hour. Thats 7 30 from now. What were the factors that led the fed not to raise Interest Rates at the last meeting . We will find out very, very shortly. Hi, everybody. Im Brian Sullivan. Four big stories were following for you right now. Its that kind of day. First up, the fed minutes are out at the top of the hour. Bill gross suing his old firm pimco. His lawyer will call in ahead. Also, Kevin Mccarthy will not seek House Speakership and our fourth big story on this busy thursday is a rally in oil. Will saudi arabia raise prices . Four stories, 60 minutes. My math says 15 minutes per story. No shortage of news today, bri. Never ending hunt for yield. Is it possible to see outsized returns for doing good . Thats what the social Choice Bond Fund is doing. Lets meet the manager, steve libertor. The knock on socially responsible investing or es investing has always been its a sandbag around the managers ankles. You dont agree with that. We do not. We view the criteria as a competitive advantage. When you think about the way fixed income markets work, you generally are getting paid for avoiding losers, not for picking winners. When you use the criteria, youre identifying the best operators and managers so sure supporting the leaders in respective areas. When you say competitive advantages, what are your returns compared to your k competitors. We are compared to all other intermediate bond funds that dont use social criteria as well. Let me ask you a question here. Esg means environmental, social, arou and corporate governance. Lets say you owned a volkswagen bond today, what would you be doing it . We would be in a position of selling it or looking to reduce the position simply because the obvious impact of the governance that was going on at volkswagen has failed in this particular instance, and we would want to reduce our exposure because it doesnt appear theyre a leader in their respect of it space. If we just sort of step back a second from just esg investing, where do you see the bond markets or the debt markets heading over the next three to six months especially keeping in mind the article we saw today and that is that china is dumping u. S. Treasuries and other Central Banks around the world are also offloading their treasuries which could have major implications for yields. A lot of people have thought about the fact of Central Banks selling treasuries as a form of quantitative tightedening, but when you think about the impact in the market on yields of selling from a foreign bank of treasuries, their purpose is actually impacting the valuation of the dollar which is obviously keeping our treasuries a little bit higher on a currency basis, which is impacting inflation by muting it by having a stronger dollar. Take me through your portfolio, some of the bonds you cited in a Research Note were concentrated in solar and wind power, alternative energy space. So is that 5 of the portfolio, 35 of the portfolio . How does the portfolio sliver . We basically focus everything on relative value. So for us its a matter of looking at individual security and determining does it fit our profile for where they think rates are headed and does it provide attractive relative value because we want to do in running our funds, let people know that social investing and capitalism are not mutually exclusive. They work very nicely together and they can croat a very nice virtuous cycle. Thank you very much for joining us today. Thanks for that. Thank you for having me. That will do if for the first hour. It will be a very busy hour. Well stand it over to Brian Sullivan and team here a few seconds early to get those fed minutes right when they break. Brian . Thank you very much, tyler and mandy. Thank you very much. Hi, everybody. We are just seconds away from the big fed minutes. Stocks are higher up 29 points right now. Maybe the market on hold. They want to see what the fed governors are saying, how many really wanted to raise rates at the last meeting, what are they saying about the economy Going Forward. The 10year yield at 2. 09, oil up. Its a big day. Lets get to steve liesman. Thanks, brian. The fomc members at their last meeting were worried over global and Financial Market developments. A lot of talk about there was concern over the high level of the dollar and the effects of Slower Growth in china and emerging market countries. Downward pressure on inflation, however, was seen as transitory and they were not necessarily confident, however, that inflation would rebound to 2 . Tighten before 2 according to some was seen as eroding their credibility. Growth was seen continuing at a moderate pace. Labor slack was seen either substantially reduced or almost eliminated by some. However, they did see low wages as a sign of continued labor market slack. The time for tightening was near according to the minutes, but they found it appropriate to wait. On the critical issue of what role markets played in policy, they said Market Movers were not seen bearing significantly on policy except to the extent they affected the economic outlook. Market movements were seen as having a small and transitory effect. But theres a lot of dovish talk in the minutes here. It was policy was in a better position to respond so upside risk in inflation rather than downside and a rate hike was seen as sending a confidence signal on the u. S. Economy. There was concern among some hawks on the committee that a rate hike delay could force sharper hikes down the road. There was a discussion, a brief discussion, no decisions were made by the fed about letting the Balance Sheet decline. S a for the fed staff forecast, something followed closely by especially governors, it was seen as a little weaker, and they lowered their overall estimate of output in the u. S. Economy and theyre now saying inflation will be slightly below 2 even at the end of 2018. Brian, overall, it doesnt seem like these minutes suggest a call that was very close. It seemed like you didnt have a whole lot of hawkish dissent here, this idea of raising rates. The committee was pretty well satisfied and pretty concerned about what was happening overseas and the effects on the u. S. Inflation. I think it was ubs that about a month ago put out a chart showing the number of times the Federal Reserve mentioned the word china, and the last meeting was mentioned more than all the other meetings this year combined. That suddenly it sort of popped out of nowhere to them. I didnt get a chance to count that up, but the concern over international developments, concern over china, and even this eroding confidence that theyre not going to get to 2 is something that plays through in the minutes. You know, some guys described it as a close call, not raising rates at the meeting but i dont get that impression from the minutes. It country seem like a close call except to the extent that the argument out there is against raising rates at that meeting. Lets bring in rich, 1. 5 trillion on under management. Whats interesting about what steve said and the thing that stuck out to me the most, which is some on the fed apparently thought it would damage their credibility to raise Interest Rates before inflation got to 2 . Do you think they should be thinking about that . Well, the fact that theyre acknowledging it means its on their mind. The textbook would say because of the long and variable lags you need to hike before inflation gets to 2 . You have at least some on the committee that are concerned about the inflation projections, yeah. The other thing that stuck out was we talk about this global commodity deflationary super cycle. Apparently they think it might be transitory. Do you . Janet yellen clear clearly the decline in prices will be with us for a while. Their view is if Commodity Prices stabilize, the negative impact i dont know if that was a direct quote from the minutes where you said the time for tightening is near. Reads like something out of Edgar Allan Poe but if thats true, how can we read this as anything but hawkish . No, no. Thats the problem. We dont have enough characters in our little decos down there for the full statement. The statement was the time for tightening is near, but its appropriate to wait for now. Its grammar. Its like we have to talk to our graphics people about getting more characters down there. You have to read them both like sequential sequentially. If i can sum up the fed, rich, to steves point its kind of like were almost there but not really. Yeah. Well, you know, there was some commentary after the meeting about it was a close call, and that was jarring compared to the statement we got in the chairs press conference. It sounds like for the september meeting it really wasnt that close a call, and i think that at least helps us to understand that press conference. Steve, do you anticipate that you watch all the people who watch the fed, namely the economists on wall street, that people are now going to come out since it wasnt that close in september, that perhaps the march 2016 time frame is much more likely now especially given that things in the emerging markets and china are not getting much closer to any sort of resolution . You know, i think thats right. The news to me in this, melissa, is the concern that people have that its not transitory. While the chair got up there and she said they thinks its transitory, you have at least some members of the committee that are concerned this is going to be a longer term issue here of the effects on inflation. You did see the staff, i went back and looked at the prior minutes, they said we wont hit 2 until after 2016 and 17. Now theyre saying well probably be below 2 even in 2018. The idea of the 2 credibility issue, the argument of a guy from minneapolis is if you hike rates before 2 , what you do is cement in market expectations. Hey, you guys arent really serious about 2 . If you were, you wouldnt be hiking now. Or you could say theres a ten basis point but its bigger than that. Is it really going to destroy the credibility when youre that close anyway . But youre not that close. Maybe on the other side it shows flexible by the fed to say we are not dogmatic. Were going to use our heads and not just some number because you and i have argued if theyre this data dependent, why not create a complex algorithm where a computer ibms watson will determine what Interest Rates will be based on dat tha inputs. First of all, we dont argue, we discuss, we chat. But the fed would say theyre not that close. Theyre 0. 6 or 0. 7 off of it now. Rich is an expert on this thing. Is the fed trying to fine tune too closely . I think the challenge for them is theyre trying to communicate a liftoff path and a destination and theyre uncertain on both. So i think the fact that the committee is divided on the pace and the destination means youre getting a complex communication. The next thing i would mention is we got a soft labor Market Report after this fed meeting in terms of the expectations. Theres some on the fed who say Going Forward we should get used to 100,000, 125,000 prints on payroll friday. We didnt get a lot of color on the the minutes on this. Ill summarize that with if you dont like your grade, change the test. Rich, i cant let you go without asking but this. Obviously bill gross, you work at pimco. Bill cofounded pimco. Huge lawsuit against pimco today. Your thoughts . Im not going to comment on that. Do you know bill . I do know bill well. I knew him for ten years. Good guy . We know bill well. Going to stay away from that. No comment. You know i had to ask. Obviously. Thank you for coming on. You were the one that happened to be here. Lucky you. S a always, yeah. Well let you go. Joining us now is, in fact, bill gross attorney patty glazer joining us from los angeles. What is the rationale behind this lawsuit . Brian, thank you for having me. Two things, one this is an opportunity that mr. Gross is taking to tell his story. Hes a principled guy. He thought that he had this was the time to tell his story, and to the extent he has any success in the lawsuit, he intends to give any success, any monetary success, to charity. So this is a completely in our view a completely principled move. Theres two things that stuck out to me. Its a fairly long filing, maisch not by your account but by our account in the media. Theres two things that really stuck out to me. Number one, when you read the complaint, patty, from a laymans perspective, it reads like a thriller in a way. Are you guys alleging there was a fairly highlevel conspiracy at pimco because theres backstabbing. You have people using secondary cell phones to leak stuff to the media. Its a fairly wild story. Well, i wouldnt use the word wild. I think the complaint actually tells a story, and i think the complaint is actually not written in that much legalese. Its pretty straightforward, and i think it tells a story from bills perspective of how he was pushed out of the company. I think thats pretty clear. No, it is and thats actually what i meant in the sense it actually is readable. Theres not much legal clutter in there. You read the story, and you go and you say theres certain executives at pimco that bill is alleging conspired against him and somehow convinced the Parent Company to go with their plan because youre arguing that gross actually had a Succession Plan in place and then was sort of double crossed, correct . Thats what the complaint says. I stick with the complaint. We spent a lot of time on that complaint to make it both clear to everyone and also to correctly tell the story from bills vantage point. All the other stuff aside about the allegations, it looks to me like the basis of the complaint is breach of contract and simply put, you are arguing that the pimco pension fund, the profitsharing plan, is a contract and thus by effectively terminating bill, the contract was breached and he is owed a portion of his bonus. Is that how to read it . We are youre very close. I think what im saying close to the same thing. He had a deal with pimco. They breached the deal and hes owed a lot of money. Is the key question though whether or not the profitsharing plan should be considered an enforceable contract . Its not the profitsharing plan per se. Its they have a contract that they live with for years on how bill was to be receive his remuneration, and that was according to the complaint completely breached. Whats the next step . Next step. We will as quickly as we can serve the complaint on the other side. Theyll have 30 days to respond to the complaint, and we are then there will be discovery. Depositions will be taken. Im sure theyll want mr. Gross and i can assure you we will want plenty of their executives who we believe were involved in the series of ep vents thvents set in the complaint. When did bill bring this to you. How long has this been in the works . I say this with a smile, brian, im not going to answer that question. Okay. Second question, would you settle . Brian, im not going to answer that question. But thank you for asking, and i dont blame you for asking. Patty, thank you for coming on. We do appreciate it. Thank you very much. We say that with a smile. Have a nice day. Thank you. Thank you. Obviously we got in touch with pimco. They released a statement to us not saying much but this lawsuit has no merit. Our legal team will be responding in court in due course. Our focus remains our clients and their investment portfolios. They havent served pimco yet. They filed it in orange county, california. Once they file it, once they serve pimco in a couple days, pimco and their attorneys will then have 30 days to respond, so this is just getting started. All right. Up next, we have a lot more news out there. A big shocker on capitol hill. Kevin mccarthy will not seek speaker of the hour or the house rather. That latest fallout ahead. Plus, one senator came on this very network yesterday saying investors should short sell fannie mae and freddie mac but Bethany Mclean got pretty fired up about it. Shes going to join us. And later on, how americans are winning the war against zombies, real ones, but these are in housing. Well explain when power lunch rolls on on a busy thursday. Stick around. patrick 1 whats it like to be the boss of you . patrick 2 pretty great. patrick 1 how about a 10 raise . patrick 2 how about 20 . patrick 1 how about done . patrick 2 thats the kind of control i like. And thats what they give me at national car rental. I can choose any car in the aisle i want without having to ask anyone. Who better to be the boss of you. patrick 1 than me. I mean, you. Us. vo go national. Go like a pro. Some neighbors are Energy Saving superstars. How do you become a superstar . With pg es free Online Home Energy checkup. In just under 5 minutes you can see how you use energy and get quick and easy tips on how to keep your monthly bill down and your Energy Savings up. Dont let your neighbor enjoy all the savings. Take the Free Home Energy checkup. Honey, we need a new refrigerator. Visit pge. Com checkup and get started today. Welcome back, everybody. Im Brian Sullivan. Were following yet another developing story at this hour. House majority leader Kevin Mccarthy will not seek to replace john boehner as speaker of the house. Lets get to john harwood with the latest. John, not only is this a big development, i guess its even more surprising given that a couple of hours earlier today didnt mccarthy talk about this . Well, look, Kevin Mccarthy has been running ever since john boehner made the announcement. You talk about a couple hours. Five minutes before he pulled out of the race i said on cnbc he was very likely to be the speaker. I was shocked by this, and i think pretty much everyone was shocked by this. He determined, especially after he got blowback for his statement about the Benghazi Committee when he seemed on fox to associate the purpose of the Benghazi Committee with driving down Hillary Clintons poll numbers, Hillary Clinton attacked, members said, oh, Kevin Mccarthy cant speak very effectively and communicate effectively. That spurred more opposition to him, but when he got into that caucus today, he announced that he determined he couldnt get the 218 you need to become speaker, and he was pulling out. But it shows you, brian, that this House Republican caucus is in severe disarray. You have a bloc of conservative members not in line with the imperatives of governing, that is to say compromise with other people in the party, with a white house that disagrees with you, and theres nobody on this planet that could tell you with any confidence right now who the next speaker will be. I was going to say, quickly, you may decline to do this but im going to ask you to opine because you have been covering politics for so long. In your mind was it the benghazi comments that effectively undid Kevin Mccarthys bid for the House Speaker. I think that was part of it and he acknowledged that today, but the same problems dogging john boehner would dog Kevin Mccarthy because he was trying to govern, and there are people who dont want to do that or think that governing means other branches of government is going to come to them. Paul ryan has now declined to be the speaker. When you look at who potentially could succeed john boehner now, you have got names like Jeb Hensarling, trey gowdy, tom cole, peter roskam. All of those are possibilities, but weve got a long way to go before we figure out who can get a majority. Lets try to figure that out. John harwood, thank you very much. All right. So what comes next . Lets bring in ed mills from fbr capital markets. Before we get your take on whats going to happen, what do you think happened . I think its the comments about benghazi, and i think its more it doesnt matter who is in this position. You only take 30 members of the Republican Caucus to deny anyone 218 votes on the house floor. And right now the members that group of 30 would want is unacceptable to the rest of the party. I think a lot of the conversation about who it will be has to also include a bipartisan option. I think thats extremely unlikely at this point, but unless you have 218, you got nothing. What does it mean though for the Financial Market . You work for fbr capital markets, its a financial firm. When you look at this development, how do you advise fbrs clients about what it means for their investments and their money, if anything . I think oddly enough this is actually good news in the near term for the market. We see Speaker Boehner will stick on until we have another speaker. He was going to leave on october 30th, and the debt limit was going to be up on november 5th, so what were looking at here now is that its very likely hes going to be on, cut a deal on the debt limit, probably into 2017, and that gives us an ability to kind of remove the biggest threat from the market that congress can cause at this moment. You had to place a bet on a name, jordan, gowdy, roskam, somebody else . I would say someone else. I do like tom cole. He ran the Congressional Campaign committee for republicans. He has a lot of these guys kind of on his side. Hes kind of a dark horse candidate. Yeah. Beyond that the peter roskam that john mentioned, another well respected, and theres going to be a huge pressure to see if we can get paul ryan kind of to reverse his previous decision because hes probably the only nationally known candidate that can get to the 218. Ed mills, fbr capital markets, a pleasure. Thanks for coming on. What sort of an impact will it have on your money. Lets bring in jack ablin and jerry castilini. Great to speak with you. Jack, start off with you. Ed had mentioned that this would ensure smoother sailing through that debt ceiling limit on november 5th . Do you agree . I would agree that near terms it makes a lot of sense. We have some consistency with boehner. He has certainly less at stake now so he will be willing to probably compromise and push things through even if it means his own tarnished image within his party. However, longer term, you know, historically the market has tended to embrace gridlock. The market tends to rally in periods of gridlock. However, what we have to keep in mind was in those periods, we could rely on Monetary Policy. Now that Monetary Policy has pretty much reached the end of the line, certainly cant lower Interest Rates much further than they are, we cant increase the Balance Sheet. Maybe we can reduce the reserve requirement, but my guess is that the regulators dont want to do that, so we probably at some point really do need fiscal policy. We do need congress to Work Together to try to carve out infrastructure, tax reform, immigration, and Public Education in order to push our economy forward. So, jerry, would you agree this could mean rougher waters for the market longer term because of the gridlock in light of the inability for the fed to do much more on the Monetary Policy side . Well, i guess, first of all, jacks much smarter than i am so i dont want to disagree request him congress term. I guess with the issue right today and whats in front of us is more disconcerting for me and thats the market today hasnt discounted any type of issue with respect to shutting the government down or delaying the debt ceiling. Thats whats bothersome to me, right . The market has had this nice move off the square ovcare over summer and its apparently discounting kind of smooth sailing in washington, and the notion that whatever reason we would go to the grecian formula of popular government by wandering through the halls and trying to decide whether or not the government would be open, that would scare people. It scared people in 2011. It was a bad moment for the overall economy and stock market, and im concerned that unless we get some kind of charity in the next week or so, this would weigh on stocks more in the near term and then over the long term it would probably give you a chance to improve and come back to your senses. Im a little worried. Jack, last question to you. Fomc minutes, it sounds like perhaps thtion more fodder for those who believe march 2016 is more likely. Are you in that camp and is that a good thing for the markets . Yeah, i mean, im in the camp of what they should have done versus what they did do are two different things. I think they should have tightened trite ed to get so dry powder back in the system. Given the set of circumstances, yeah, i see zero this rates as far as the eye can see right now. I dont see how now with this global slowdown washing up on our shores, i dont see how they can act to restrain anything right now. All right. Going to leave it there, guys. Thanks so much jerry and jack. Appreciate it. Here is a look at some of the best performing Retail Stocks in all the market right now, but guess what. This could all change. Were talking retails revolving door ahead. Plus what to expect from alcoa when it reports results. Thats right, folks. Yet another earnings season is upon us. Back after this. Youre watching power lunch on cnbc. Im melissa lee. Shares of alcoa trading flat after earnings after the bell. Lets get to Morgan Brennan with a preview. Unofficially kicking off earnings season. And the street is looking for 13 Cents Per Share on 5. 65 billion in revenue. Now, that eps estimate renting a 59 plunge yearoveryear. Analysts expect por weakness in alcoas upstream operations, mining and smelling since Aluminum Prices declined last quarter. Were looking for comments on china which a top consumer and blamed for the supply gut. Their ongoing push into manufacturing parts, that should continue to show signs of gaining ground. The Company Announced two major supplier contracts with airbus and lockheed martin. But the biggest focus of todays Conference Call is likely to be alcoas plan to split into two publicly traded companies in the second half of 2016. Analysts and investors are looking for more clarity on the capital structure and the state of the upstream portfolio. Shares are trading flat ahead of the Quarterly Results after the bell. Be sure to catch our exclusive interview with klaus kleinfeld. Thats after earnings hit the street coming up 4 00 p. M. Eastern time on cnbc. Brian . Oil just hitting 50 bucks a barrel. Lets go down to Jackie Deangelis at the nymex. Whats moving the price of oil up 4 . Its a big move today and its all happening in the last 30 minutes here. That intraday high of 50. 07, traders are telling me well keep testing that 50 range until eventually we break and hold. Whats moving it is really the increased worry about the situation of russias involvement in syria. This is has longer term dynamic implications for the middle east, of course, because of its relationship with iran and shifting dynamics there. So having said that, even if iranian oil comes back on the marketplace and that does appear to be bearish, if iran and russia regain control of that region and sort of push saudi to the sidelines, that becomes a big influencing factor for oil and thats the kind of wildcard that could really send these prices higher, you know, and farther away from what the fundamental situation is saying. Having said that, were probably not going to get the close over 50 today, but thats not to say were not going to keep testing those levels to try for that breakout, brian. To be clear, okay, the headlines aside about russia bombing, even talk about where perhaps they were accidentally bombing, ill leave that out, is the fundamental situation for oil has not changed. Its still the same. Were still over supplied. Right. And thats absolutely true. We are oversupplied here in the United States and we are oversupplied abroad as well. We have seen no evidence of opec or saudi cutting production in a meaningful way, but for people who read those headlines and they get worried about geopolitical instabilities and a lot of traders and Institutional Investors do, they get nervous about it and traders will tell me this is the kind of wildcard action that nobody can predict that could send the price much higher. Thank you very much. Still ahead, how we are becoming one giant nation of zombie slayers, at least in housing. Well explain that rather bizarre headline. Plus, one fast food stock that the street sees double digit upside from here on. I guess its appropriate that the shows name is power lunch. Were back in two. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is, can your business deliver . Were back in two. Were back in two. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Hi, everyone. Im sue herera. Here is your cnbc news update at this hour. Democratic president ial hopeful Hillary Clinton proposing a fee on the liabilities of large Financial Firms to address risks they pose for the economy. She outlined the fee as part of a broader package of programs designed to improve oversight of the financial sector. Doctors without borders releasing new video of the hospital compound that was filmed after it was bombed by u. S. Jets. The air strike last saturday in kunduz killed at least 22 people. The group leaves the air strike may have been a war crime. European officials gathering in luxembourg to discuss europes migration crisis. They are assessing the plight of people seeking ref juduge in eu. And Michelle Obama honoring student poets for sharing their deepest thoughts. Five teens read their original works. Poetry in the blue room. Its the highest honor for youth poets. Congratulations to them. That is the cnbc news update at this hour. Brian, back to you. Sue, thank you very much. Its time for our daily segment street talk. We walk you through Analyst Recommendations we think you need to know about. Stock one. Chipotle. Suntrust starting coverage with a buy and an 850 price target. They think chipotle is set up for another strong year. They say the company has, quote, more sales levers to pull than in the years past. They like the Commodity Prices, melissa, have come down. They also note watch the growth at the shop house and pizzeria. I will see your chipotle with judge brands. Credit suisse is upgrading this from neutral from underperform. Expectations have been reset. The analysts believe the pressure to chin out the China Business will only increase. The analyst likes that the Company Seems to have come around to the idea that its got to slow down store openings in china in order to fix the business. The price target cut to 75 from 86. Third stock, groupon. Cowan and company says do not own groupon. They start coverage with an underperform. Fancy way to say sell. Their target 2. 75. 25 below the current price. They say while groupon may eventually be a turnaround candidate, their own internal numbers show that the marketplace maybe has peaked. They also note low operating margins that are trending even lower. The highest price a stock has traded up was the die of its ipo. Fourth stock, l brands. Driven by strength in Victoria Secret and bath and body works by Stifel Nicolaus says not to chase the stock. The pe is well above the 20year average and priced with little margin for error. The stock is up 10 . Stay with clothes. Your under the radar game is giii apparel. Its an owner of brands like wilson leather, andrew mark and a swim wear line. Is that right . I just know its like 400 swimsuits. This follows recent meetings with Piper Jaffray reiterating overweight. They see double digit growth. They satisfyee 84. The two sectors set to report the worst earnings decline in the fourth quarter, energy and materials, are surging. Lets discuss it and trade it with the trading nation team. Larry mcdonald, gina sanchez. Larry, if any, how much more upside do you see for these groups . Well, as we discussed last week in terms of the potential for the fed pushing the rate hike out, the Energy Sector is the big winner, and since that ugly jobs number, youve got brazil, emerging markets, up 23 . Oil stocks up about 12 . Gold miners up 19 . So the commodity space and emerging market space are the big winners. The s p is only up 6 . So if the fed is pushing the expectations out to march, maybe to june, then this space will be the big winner. They made a big move over the short haul so you may get a pullback but its a big winner. Gina, would you investor in energy and material stocks right now . Right now i wouldnt, brian. I agree with larry that the macro environment and the fed pushing out is a pouch however the fundamentals are still poor. It will take us a long time to work through the supply p. M. Im defining a long time six to nine months before you see some kind of normalization. Whats happening in pushing the prices right now i dont think is the fed. I think its more whats happening in syria, and moves in oil prices that are driven by geopolitical moves tend to be really brief, brian. I think this is an opportunity to possibly sell some exposure. You might still be hanging on to and wait for a better entry point later next year. All right. Long live the rally. The rally is dead. Gina, thank you very much. Larry a pleasure. For more trading nation go to tradingnation. Cnbc. Com. Did a u. S. Senator really recommend shorting shares of fannie mae and freddie mac . Kind of sounds like it. And author Bethany Mclean is fired up over it. Shes here. The dow briefly crossing over 17,000 as well. A busy thursday. Stick with us. So whats your news . I got a job ill be programming at ge. Oh i got a job too, at zazzies. friends gasp the app where you put fruit hats on animals . I love that guys, ill be writing code that helps machines communicate. interrupting i just zazzied you. phone vibrates look at it friends giggle i can do dogs, hamsters, guinea pigs. You name it. Im going to transform the way the world works. proudly i programmed that hat. And i can do casaba melons. Ill be helping turbines power cities. I put a turbine on a cat. friends ooh and ahh i can make hospitals run more efficiently. This isnt a competition was going to clean if an better than a manual . He said sure. But dont get just any one. Get one inspired by dentists. With a round brush head. Go pro with oralb. Oralbs rounded brush head cups your teeth to break up plaque and rotates to sweep it away. And oralb delivers a clinically proven superior clean versus sonicare diamondclean. My mouth feels super clean. Oralb know youre getting a superior clean. Im never going back to a manual brush. Shares of freddie mac and fannie may up more than 11 largely over rumors the white house has changed its stance and wants to revive the giants, but u. S. Senator bob corker accusing hedge funds of pushing that rumor saying its not true. Listen to him speaking to our own Rick Santelli. Listen to this. Theres no factual background whatever so this rumor theyre putting out that the white house is considering reinninreipoing. That rumor forced those share prices to spike up yesterday, did it not . I dont know, but people should be shorting it because its major bs. Its not theres no factual background to that, none. Its just talking your own book. Bethany mclean just wrote a book on fannie and freddie called shaking ground. You maemailed me basically sai wtf. Your comments on corkers comments. That entire conversation was absurd. Theres one piece of that conversation that wasnt absurd and thats when corker said the government has been totally inept in dealing with fannie and freddie. The whole lost of it, a u. S. Senator saying to short the shares of a company that hes been actively engaged in shaping its legislative strategy. Thats crazy. Lets back it up. Because were going to give senator corker a little bit of a mulligan only because he did say short it but it sounded like he was being more not really saying i would advise you to call your stockbroker and lets move on to the rest of the absurdities in that case. What he didnt tell you is his plan that he proposed would also keep taxpayers on the hook and perhaps would keep them even more on the hook because by handing the Mortgage Market over to the big banks, it would make the banks too big to fail. The other absurdity is hedge funds and taxpayers, im sorry, are not opposed to each other. Their interests are actually very alund. The u. S. Government has the right to own almost 80 of fannie and freddie. Rn th were they to take them public it would be a huge win for taxpayers. There are probably viewers saying hedge funds and taxpayers will never be aligned. The hedge funds that the investors own part of the company, observe part of the companies, they own some of the preferred shares, some of the common shares. The u. S. Government as a result of this conservatorship structure emanating from the 2008 financial crisis has a warrant that allows it to own almost 80 of the two companies. So were they taken public again, yes, investors would benefit, but that warrant, 80 of these two companies could be worth hundreds of billions of dollars. Whether thats the right structure for Housing Finance is the question, but the question isnt who is pitting investors and taxpayers against each other. As somebody who talks for a living, i have been on the record as telling the fed officials they need to stop talking. Like every day we have another fed official talking about something up, down, rates, dovish, hawkish, the fed pigeons is what i call them. I wonder if all of congress should stop talking about fannie and freddie not because its not an important issue but because they are listed companies. Can you imagine if Congress Every day was coming out and saying something about exxon or monsanto or some other thinly traded stock. Can you imagine the outrage on the right if Elizabeth Warren said you should short j. P. Mopm and goldman sachs, people would go crazy. Because these companies are such pariahs, especially on the right, vukyou can have a senato say it on national tv. You recently spoke with ruth that was a segue. I interviewed here shes basically running google. Well, shes the new chief Financial Officer of google, and alphabet. One of the most impressive people i have ever met. Came from Morgan Stanley. A Morgan Stanley bankers for years and years. Shes thoughtful, experienced, shes smart, and shes a lovely person to boot. But her presence there doesnt answer this fundamental question. Investors have been very impatient with google over expenses. Youve got this highly profitable advertising business, and then all these moon shots. They have like dogma sages for free on campus. Also big bets on businesses costing big money that may never work. Google is making noises about doing the right thing for investors. But you have a conundrum, short term profits versus long Term Investments on big bets that may never pay off. Did you inadvertently give us a clue as to your next article . Is it on google, on ruth . I dont think i would take that one on. Its too positive. Except for the stuff you just said. I cant help myself. Its okay. You write for a living. I talk for a living. Its a good combo. Beth think, thank you very much. Take a look at the s p 100 retail etf. Up by 1. 4 but down 6 over the past three months. What can we expect from retail heading into the Holiday Season. Plus why are so many retail ceos leaving right now. Well get all the details on retail next on power lunch. Eligible for medicare . [] thats a good thing, but it doesnt cover everything. Only about 80 of your part b medical expenses. The rest is up to you. So consider an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement insurance plans, they could save you in outofpocket medical costs. Call today to request a free decision guide. With these types of plans, youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. Join the millions who have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp. And provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. With all the good years ahead, look for the experience and commitment to go the distance with you. Call now to request your free decision guide. Welcome back to power lunch. Quick market check here. We are above 17,000 on the dow for the First Time Since august 20th. In fact, all three major indices are higher at this hour. Weve seen a flurry of ceos stepping aside which means new people are taking over as we head into the Holiday Season in the retail sector. Courty reagan joins us now. There has been a lot going on in the retail and a lot of debate over the strength of the consumer. Its that revolving door to the c suite. Within the last 24 hours four retail ceo changes were announced including highly regarded tjx ceo who will move to executive chairman and the president who will take over. Tilley ceo daniel grease mere and edwin thomas is coming back, plus the ceo at ann inc. , tommy ba ham ma brand and ralph lauren, dont forget American Eagle and abercrombie they are going on years without permanent ceo. Were seeing less responsible successions in retail because of how challenging the business and industry is right now. Many big established retail boards are letting ceos sit for too long making the success process messier plus retail boards new retooling. Craig riley says the optimal skill set is actually in pretty short supply because of how fast retail is changing. The ideal candidates are visionaries with incredible flexibility. Merchandising and operational expertise are no longer enough. Theyre very hard to find right now. Brian. We want to continue this retail discussion so lets bring in cnbcs retail analyst stacey. Your take on all the nice nois that courtney is bringing us. Yes. There has been a revolving door in retail as of late. The most interesting one is clearly Stefan Larsson leaving the gap, old navy and going to ralph lauren. This is an example of a company thinking out of the box. They are not going and churning the old guard obvious suspects, theyre bringing in somebody who is the new guard who is a visionary who is a leader and actually who has new ideas. So, you know, kudos to ralph lauren for making that move. On the flip side gap is left at probably the toughest time of the year, right before holiday, without their vision naer that they were depending on. I was going to ask you, stacy, is it bad timing or good timing . Is the Holiday Season already in place in terms of everything thats going to be ordered and what the land is or is this actually bad time given the holidays . Yes. Well, melissa, thats a good point. Holiday, the merchandise has already been ordered, its ordered months ago, the plan is already in place, however, when it comes to a company like gap with so many moving parts and with same store sales down, you know, maybe high single digits, we will hear after the bell tonight, you really dont want to lose somebody that is really strong in terms of the execution and also who the company is looking to and saying, hey, we want you to mimic your accomplishments in the other brand. So in that sense its very bad timing for the gap. You once said on this fine program, stacey, that Abercrombie Fitch was, quote, the worst retailer in the world. They have just brought in new blood r they still . Yeah, brian, you got me on a day where my edit button was on. You were fired up, thats for sure. Abercrombie i was fired up. Abercrombie that is no longer true. Abercrombie has brought in new brand president s and, by the way, theyve opened the shades in the stores, there is light coming in, theres less palm trees hitting you in the face, lower price points at hollister, so there is some improvements there. They are also still looking for a ceo. So we will see what happens if it will be one of those brand president s or bringing someone in from the outside potentially alienating the inside brand president s. You bring in two top level people, clearly its just design they have a cage match, one of them wins, the other one exits, thats whats going to happen. Mud wrestling, thats how they work it out. They should go to bath and body works to clean up. Stacy, thank you very much. Up next, winning the war against zombies on your block. We are back right after this. Im here at the Td Ameritrade trader offices. Ahh. Steve, other than making me move stuff, what are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place that lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim . For all the confidence you need. Td ameritrade. You got this. Excellent looking below the surface, researching a hunch. And making a decision you are type e. Time for a change of menu. Research and invest from any website. With e trades browser trading. E trade. Opportunity is everywhere. Another day, another decline for biotech and specifically for biogen, that stock is down 10 in the past month. Tonight on fast money we have the chairman of bio deck and also the pipeline in the sector. We will look forward to it. Zombies getting slade in housing. Diana olick, why are we talking about zombies . A zombie foreclosure is the owner has left but the bank has not repossessed the house. Higher home prices and new streamline foreclosure systems have combined to wipe away much of the zombie population, down 43 from a year ago, thats according to realty track. Over 20,000 homes and thats only about 1 of the vacant home population. Honestly thats whats most interesting about this new report. There are 1. 5 million vacant homes in the u. S. And well over half of them are not in any kind of financial distress. They are either owned outright or the owner is up to date on the mortgage. Why so many . Clearly some are in such Poor Condition they are not worth anything to the owner. You see a lot of that in the midwest, but given the supply of homes for sale is so low today the overall vacancy rate still remarkably near recession highs. Closing bell starts right now. And welcome to the closing bell, im Michelle Carusocabrera in today for kelly evans here at the new york stock exchange. And im bill griffeth. What a newsy day. I dont know how we will pack all this in the next 120 minutes. Stocks just about at the highs of the session after those fed minutes released last hour. Its not just equities on the move. Lets look at some of the other markets that have removed since the release of those minutes, the dollar index continues to