200-mile-an-hour winds and it's heading right toward mexico. we're tracking this very dangerous situation. we begin with the rally on wall street with another big rally. this time it's thanks to a rate cut by china and also some very good earnings right here at home. for the technicians out there, the dow, the s&p, and the nasdaq have crossed above their 200 day moving averages with the s&p now going positive for 2015 joining the nasdaq in that camp. the dow is still negative year-to-date. we're on watch for that as it's up by 106 points right now. the s&p is gaining by 0.8% and the nasdaq is the clear winner, tech is leading the way up by nearly 2% for that index. let's get more trading action this hour. mary thompson from the nyse floor, but first morgan brennan, you have the big star at the nasdaq. >> i know. it's really -- the nasdaq has been soaring today, up almost 2%, 1.9%, 94, almost 95 points to 5,014. this is first time since august 19th we've seen the nasdaq trading above 5,000. that's when we had that market correction picking up steam. trading volume, 12% above the three-month average here at the nasdaq. in terms of the gains, the large cap nasdaq 100 fairing even better than the composite, that's up 2.5%. this is a tech story after better than expected results. microsoft is up 10%. shares of alphabet class c is up about 9% today. and amazon also up nearly 7% after posting a surprise profit for the second quarter in a row. all of this giving lift to facebook as well. that stock hitting an all-time high up 2%. first time we've seen it trade above 100 bucks a share. but there are other stocks rising on earnings as well so we don't want to lose sight of those, net gear, juniper networks, all of those moving to the upside as well. one notable momentum laggard, pandora, revenue missing expectations. music streaming service announcing a settlement over song royalties. >> what a move for nasdaq. the dow is up but it's off its highs at this hour. let's check in with mary thompson. >> hey there, tyler. we have triple digit gains for the dow, but we seem to see the rally stalling a bit. we see moderate volume. look at the s&p 500 because art cashin saying that the s&p bumped up against some resistance at about the 2081 level. the leaders, of course, the tech space following strong earnings by google, microsoft, and amazon. and utilities as we see this risk on trade come back into the market, there has been very, very dovish commentary from the world central banks. the china rate cut, all of this causing utilities to lose a little of their luster. we're coming up on the fourth straight week of gains for the dow jones industrial average. let's look at the dow's best performers. microsoft after reporting strong earnings last night. united technologiies earlier ths week announced a buy back. apple ahead of earnings to be released next week and mcdonald's which had strong earnings and some decent sales numbers reporting those yesterday. once again the dow is up 99. losing a little bit of steam here. back to you. >> mary, thank you very much. brian sullivan now for a news alert. >> pretty much now every week we expect oil rigs are going to drop because the price of oil stays low. well, that is not happening. oil rigs falling just one week over week according to baker hughes. gas rigs went up one so net net no change in the number of gas and oil drilling rigs that are out there right now, guys. oil was down 50 cents on the news. now down about $1 a barrel. so oil losing some steam because we continue to not drop significantly in the near term. year-over-year, guys, we're down over 1,100 oil rigs but as we all know, production in the united states still near, not at, but close to a record high. so oil drilling rigs down just one. i know you have been waiting with bated breath since last week. i forgot to put makeup on so this is the real me. >> real you looks so different from the makeuped you. oil prices are down 6%, maybe a little more over the course of this week and that strong resurgent dollar not helping. thanks a lot, brian. we'll catch up with you later on. shares of valeant pharmaceutical rebounding. it's up by 9%. the stock has taken a beating this week. it's going to be a busy weekend as they get ready to defend their business model come monday. our pharma reporter meg terrell, what are they going to be doing in their defense this weekend? >> i'm sure preparing for a big morning on monday. it really is the moment of truth for valeant. they're planning a conference call with ten board members and executive where is it says it will lay out the facts on allegation s about his relationships with specialty pharmacies philidor and r&o. it's accounting practices and channel stuffing. they say the allegations correct incorrectinterpretations. the concerns appear to be stretched beyond the allegations in citron's report. they point to new information about valeant's relationships with specialty pharmacies as particularly concerning. the most important thing that could come out of monday's call they say is a restoration of valeant's credibility addressing key questions about these relationships. the stock is rallying today ahead of the call. bmo capital who downgraded yesterday said he believes short sellers are covering before valeant's defense on monday. >> it's all about restoring credibility at this stage. we were speaking with bill george, i don't know whether you saw the interview, but he was saying it's a true leadership crisis and maybe the ceo will have to go by the end of the year. >> that's right. bill george raised those questions as well as some analysts whether mike pearson is in it for the long haul and i think monday will be that time when he tries to prove to investors everything is on the up and up and they can believe in this story. >> and his job is on the line. thank you very much for joining us. american airlines getting clipped despite beating earnings estimates. they're down more than 15%. today it's down by 1.6%. why is the stock down when earnings are up? phil lebeau, you're taking a closer look at the numbers. >> mandy, it's all about the future. yes, 3q was a record quarter for american airlines. when you look at the net income, it jumped more than 80% year-over-year. there you see they beat the street by a nickel. revenue roughly in line with expectations. why is the stock under pressure? primarily because of the comments during the conference call where american airlines said, look, we know that the business traveler, they are providing most of the revenue for us, but it's the occasional traveler, 87% of the people who flew american just once last year, they generate more than half of the revenue, and so as a result american says we want to bring some of though occasional travelers in, people who might be going to spirit or frontier or some other discount carrier and that's spooked investors who might be worried about a fare war. executives have said we're not going to get into a fare war but we're not going to stand by and let others take market share when we could be more competitive in terms of pricing for that occasional traveler. in a nutshell, that's why shares are under pressure today. >> thank you very much. moving on now to a big story for the next few days. it's being called now the strongest storm ever measured, ever to be recorded. 200-mile-an-hour winds, 200, barrelling inland toward mexico's pacific coast. the weather channel's nick walker is tracking it. >> the national hurricane center says it is the strongest hurricane ever measured in the western hemisphere. patricia with a whopping 200-mile-per-hour winds in the center, a category 5 hurricane with a central pressure of a record breaking 880 millibars. this is going to be destructive for the coastline of mexico, including the resort cities of port vallarta and manzanillo. we could see destructive winds, flooding rain. we also could see a dangerous storm surge as well as battering waves. this is why we have hurricane warnings on the coastline, including these krareas. this is going to be possibly life threatening. we're continuing to watch the progress of this. although we expect to see some weakening before it makes landfall tonight, the winds will be in the category 5 strength. this is going to be a force to be reckoned with. by the time it gets into the week and beyond, it should be dissipating over the mountains of mexico, but most likely providing flooding rains even inland. we'll keep you updated. i'm nick walker, the weather channel. microsoft hitting new highs. amazon and alphabet also soaring on their results. the three things these three tech giants are doing and doing them together. a look at some of the most widely held stocks. cisco systems up more than a half a percent. you are watching cnbc, first in business worldwide. so what's your news? 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(friends ooh and ahh) i can make hospitals run more efficiently... this isn't a competition! some neighbors are energy saving superstars. how do you become a superstar? with pg&e's 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. don't 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 to "power lunch." i'm mandy drury. whirlpool report earnings, but the company missed revenue forecast so the stock is down about 20% year-to-date including the 9% plunge its seen today. citi is removing apple from its u.s. focus list stating all the events they foresaw in making that call have now played out. interestingly enough, the stock remains a buy. it's currently up by 2.6%. and at&t beat estimates by 5 cents. it also raised its full-year forecast thanks to rising wireless and directv subscriptions and the benefits its seen from cost cuts. the stock, however, ty, is little moved by that. over to you. >> five days to go. cnbc hosts the next republican presidential debate. it's wednesday october 28th live from the university of colorado in beautiful boulder, and today a big announcement, surprising one, from one of the main and best finance candidates, eamon javers in washington. >> the jeb bush campaign is saying that it is battening down the financial hatches, making across the board cuts in its expenditures, admitting tacitly it's simply been spending too much money and not moving the needle enough in the polls. look at some stats on exactly what the campaign is saying it's going to do. the payroll reduced by 40%. all but entry level salaries are being cut on the bush campaign. the headquarters staff in miami is being reduced and reasesigne and travel costs are being cut by 20%. all of this, tyler, it seems is going after this figure of the burn rate. politico reporting that the campaign has spent 86% of what it raised in the last quarter. that's a relatively high burn rate and they're going to have to get that down and hunker down for the long run if they want to make a long go of this into next year. >> this is not a good sign for mr. bush. what about other candidates, particularly the well financed one? cruz has raised a lot of money, and obviously mr. trump is living off his own money but not spending on ads the way mr. bush has. >> yeah. it's a lot easier for trump. he can simply write a check and he has his financial problems solved. jeb bush not in that position. i think what's going on here is part of this is an effort to batten down the financial hatches. also an effort to communicate to the donor class who are inclined to support jeb bush that we get, it we've been spending too much money, we're taking financially responsible steps here. you can still trust us with your money. keep those checks coming. i think part of it is a messaging thing to the people who would be inclined to give jeb bush some of that cash as well, tyler. >> eamon javers, thank you very much. should we remind you once again, why not? we're going to. cnbc hosts the next republican presidential debate. it is in boulder, october 28th, same day as the next fed meeting. mandy? >> we're going to keep reminding people until it's seared into their brains. check out shares of amazon, microsoft, and alphabet. all three are soaring on the back of their latest earnings. there's some common thread tying all ever these three tech giants together and it is fueling their growth. what is that common thread? josh lipton is live from san francisco with more. hi, josh. >> well, mandy, amazon, google, microsoft my focus on different areas of the tech universe but they share similar strategies wh enit comes to recent growth. for all the companies there's a renewed focus on transparency. that's especially helpful, of course, when you have good news to report. amazon discloses the performance of aws, it's powerful cloud computer division where revenue just jumped nearly 80%. e-commerce giant is up more than 90% so far this year. in google reorganizing under a new corporate name, alphabet, and will disclose the pr performance of its core advertising. stock racing higher up 40% this year. and microsoft breaking out its performance into new division. a second theme, all three companies are moving as fast as they can to capitalize on cloud technology. cloud services reached $50 billion. it's reached to reach nearly $130 billion in 2018. amazon is the leader but cloud services increasingly becoming a more critical part of microsoft and google's business as well. investors cheering these recent earnings reports in stark contrast to what we heard when ibm and yahoo! reported. in tech the line between leaders and laggards becoming a lot more stark. >> it certainly is. we'll get more detail this hour and next on "power lunch." thank you very much. let's get to seema mody. >> state street shares are at session lows right now down over 5%. the investment firm plans to cut 200 to 600 jobs as choppy markets bite into the company's bottom line. state street also announced a multiyear restructuring that will save them $500 million a year. the stock down about 16% in 2015. >> thank you. china's latest move to cut interest rates fueling a number of sectors, especially the miners. three ways to trade china's rate cut. and as we head out, some of the other big winners the nasdaq 100, names like seagate, wynn resorts, jd.com and i willuminal up better than 4%. share your passion for trading. that's why we rebuilt scottrade elite from the ground up - including a proprietary momentum indicator that makes researching sectors and industries even easier. because at scottrade, our passion is to power yours. in panama, which is a city of roughly 2 million people, we are having 5,000 new cars being sold every month. this is a very big problem for us with respect to fast and efficient transportation. it's kind of a losing proposition to keep going this way. we are trying to tackle the problem with several different modes. one of them is the brand new metro. we had a modest forecast: 110,000 passengers per day in the first line. we are already over 200,000. our collaboration with citi has been very important from the very beginning. citi was our biggest supporter and our only private bank. we are not only being efficient in the way we are moving people now, we are also more amicable to the environment. people have more time for the family and it's been one of the most rewarding experiences to hear people saying: "the metro has really changed my life." welcome back to "power lunch." i'm mandy drury. take a look at the action happening in skechers. the shares have been sprinting higher in 2015. today it's literally falling apart. down by 35%. is this an opportunity to get into a hot stock or should you be running away. cramer talks with the company tonight. we're also going to be doing an interview on skechers laters on th in this show. china's rate cut move giving a lift to mining stocks today. newmo newmont, randgold, and bhp all higher. >> it's those companies that are reliant on chinese demand, names like dow chemical, international paper, alcoa also higher. in general the china measures taken today are positive for the industrials and technology names. s&p tech index hitting a fresh 52-week high. it's these two sectors pushing european stocks higher. the dax up over 6% on the week. also fueled by comments from mario draghi. emerging markets seeing a big pop today as well. the rate cuts were announced, seen as a positive, not just for positive but the broader emerging market space. and keep in mind china makes up about 22% of the emerging market etf. in the commodity world, additional easing means oil and base metal prices should be recover next year. so these rate cuts are seen as positive for markets. it tells us that the central bank is committed to financial reform. second, it shows that the chinese are proactive taking action after the latest gdp number fell below 7%. lastly, it removes some of the pressures on major central banks which have been referencing china as the main factor in the recent downturn in global growth. just to put the move into perspective, we've seen six interest rate cuts since november of 2014. this is a very proactive central bank. the question is, is it enough to feed through to the real economy. >> evidence to the market that they get it. >> they get it, but the question is, is it enough to stimulate growth. as we've seen in the recent gdp number, lowest level since 2009. not very encouraging. >> but still just a tad under 7%. that's pretty good. >> mandy? >> so the question now is how do you trade china's rate cut? three picks from the cme in chicago with our good friend cnbc contributor jim. don't you think it's an interesting market reaction that crude and copper is moving lower? does that suggest the market is skeptic skeptical? >> absolutely it does. i understand one of the smaller reasons that crude and copper are under pressure is because the dollar is stronger from what's happened in europe and china. let's take copper out of it. the market seems to me disagrees with everything that seema just reported and that's that i think the market says that it's either not enough or its inconsequential, that the problems in china are far worse. they're saying 6.8% gdp and they're cutting rates at a rapid rate, it seems perhaps they're lying. the fact that copper is down sens means to me they can't really save themselves. if crude trades below $44.20ish, i think crude will haver in leg lower. i think the big winner in this is gold. europe and the pboc have both taken more steps toward dovish. if the dollar starts screaming higher than this, the fed has no choice but to come in and start talking more dovish or they will get heat from the big companies or exporters. >> if you think gold is a buy, where does it go to from here? >> below $1,158. i might be worried that it's too early. but right now i say, yes, i think gold is a buy. i think it heads -- i have it like $1,225 is my upside target on this move, and, yeah, i think it could get there. >> copper sell, crude sell, gold buy. thank you for joining us. >> thank you. >> and you just talked about and touched on gold. we just saw the price but why not show it again, $1,162. looking at the other metals, we just looked at copper. it was lower. let's look at silver, palladium, and platinum. silver down, copper lower by more than 1%. palladium is up $8 or 1.17%. platinum off 1%. to the bond market we go and rick santelli is doing what he usually does, tracking the action at the cme. >> tyler, it's been a wild ride for many securities around the globe, but mostly outside the u.s., but two year note auction not to be, had an effect yesterday. let's look at a two-day of the two year. we're in the same range as yesterday. so the curve is catching up because 2s yesterday were elevated. yields playing catch-up. on the other hand, let's look overseas. there were two 2-year notes everybody was talking about yesterday, spanish and italian. now, i have the italian 2-year, a two-day chart. historic dabbling briefly and only in a small way under zero in negative rates but it's something to pay attention to. much of europe, switzerland, the euro curve has and continues to be in negative territory. on the spanish side they briefly had some negative action in may. they're revisiting it again but also very unusual. now, let's go to the long end of the u.s. market where the 2s were in balance. the 2-day chart of the 30s has been elevated. that's the curve making its adjustment. but all in all, yields are only subtly up. a two-day of the euro versus the dollar. almost 114 when it started. now we're toying with 110. if you're an exporter in europe, you have a happy face today. back to you. >> thank you very much. meanwhile, let's take a look at the qqqs. they track the nasdaq 100 and that etf is soaring today thanks to those earnings last night from amazon, microsoft, and alphabet. the qs up 9% now so far this year. and in that index microsoft hitting new highs. facebook at $100 a share, more than that. we have the best bets in tech right now when "power lunch" returns in two minutes. ♪ they say that in life, we shouldn't sweat the small stuff. but when you're building a mercedes-benz, there really is no small stuff. every decision... every component... is an integral part of what makes the 2016 c-class one of our most sophisticated cars ever. because when you're setting a new benchmark for refinement, it is the small stuff... that makes the biggest impression. the 2016 c-class. see your authorized dealer for exceptional offers through mercedes-benz financial services. hello, everyone. i'm sue herera and here is your cnbc news update for this hour. hurricane patricia now seen as the strongest storm ever measured with winds reaching nearly 200 miles per hour. the storm expected to hit the southwestern coast of mexico between 6:00 and 10:00 p.m. eastern time tonight. mexican officials declaring a state of emergency with evacuations under way in puerto vallarta. republican presidential candidate donald trump is calling on super political action committees supporting his candidacy to return all the money they've collected. he's also calling on his opponents to do the same. trump rival ben carson will begin airing his first paid tv ads today. the two 30-second spots are part of a $500,000 buy airing in the early voting states of iowa, new hampshire, south carolina, and nevada. and the "star wars" trailer debut shown during espn's monday night football was the biggest in history. it was seen by an audience of more than 16 million followed by an immediate release on social platforms worldwide, and in just 24 hours it was viewed online more than 112 million times. that's the cnbc news update this hour. ty, back to you. talk about a force. >> can't wait for that movie to come out. >> neither can i. >> that's going to be fun. >> we'll go together. >> yeah, we'll take our kids. that would be fun. it's a date. >> you're on. stocks trading hider, the dow is up 132 points after yesterday's 300 point gain. let's check in with mary thompson. >> the dow moving a little bit higher. it had kind -- the rally had stalled a little bit, we're getting a little steam here. it's been a strong week for the dow, the s&p 500 and the nasdaq and a very strong month as well. take a look at the one-month chart of the dow up over 8%. the s&p also strong over the last month up over 6%. both of these indices probably the best four-week or coming up on the best monthly performance they've had since 2011. the winner is i.t. on the back of strong earnings we received yesterday from amazon, google, and microsoft, we've been talking about that all day. industrials also strong, helped in part by that utx news earlier this week. and financials, the third best performing sector for the week. within the s&p 500 components, the best performing components were some of these chip stocks, some of them were actually targets of acquisitions. kla tencor is being acquired. before the week it was up 23%. ebay had strong results, up 16%. texas instruments coming in with strong results up 1% and sandisk being acquired, for the week up 12%. so tech was really the winner in what was a winning week. back to you, mandy. >> absolutely. well, let's dig a little further because the gains are even bigger at the nasdaq. that index is currently up by over 2% and you can also see in terms of the actual numbers of the index itself 5,026, back above the 5,000 mark for first time since august 19th. we got those strong earnings from a lot of tech names. let's get more with morgan brennan live at the nasdaq. >> hey, mandy. so that's right. we're back towards the highs of the day here. the nasdaq composite at about 2.2%, up 107 points right now and it's still trading above 5,000. first day we've seen that since mid-august. large cap tech is driving the composite higher. microsoft, alphabet, class a and class c shares, also amazon, some of the biggest winners following better than expected earnings. take a look at what else is up. you have liberty global in talks to potentially acquire cable and wireless for an estimated $5 billion. other media names here including dreamworks, viacom, and discovery also higher on the day. another 2345iname, athena healt surging more than 20%. other health care i.t. service stocks also getting a bounce today. lastly restaurants faring well. dunkin brands which authorized a $125 million share repurchase. also higher, panera and starbucks. >> thank you very much. the s&p tech sector in rally mode tracking for its best week since mid-july. stocks such as facebook, alphabet, amazon, solid gains. so can tech keep rorg? nicholas is chief market strategist and jason hepstein is from oppenheimer. welcome to you both. nick s there any place better than tech to find growth these days and specifically revenue growth? >> there really isn't, and that's the reason tech is really becoming the most owned group for the fourth quarter. you're seeing in terms of revenue growth that companies like facebook or google or other large tech names and they're generating 15% to 30% growth year on year. you can't get that growth anywhere else and this is the week where tech really broke out and i think it will continue through the fourth quarter. >> jason, do you agree with that? >> absolutely. and, you know, the question we're getting is these stocks have had a big move, are they still worth owning and we think absolutely. when you look at these names, you know, whether it's again a facebook or a google, google is basically trading at 12 times this year's cash flow. that's the same as people are paying for disney on this year's cash flow. and your point about the movie trailer, where are the eyeballs going? they're going online. that is where the consumers are. i mean, google took a very shareholder-friendly action yesterday with the buybacks which there was some concern they may not announce, have waited until the fourth quarter. so basically you just got christmas a little bit early for google. amazon just terrific numbers across the board, e-commerce, amazon web services, and then we have facebook coming up in two weeks. >> jason, what would you be looking for to indicate we might be nearing a top in tech? your moupoint is well made a nur of these names is near all-time highs. microsoft is nearing its bubble era 1999 high. do you think there's a danger we're getting to a top? >> i am not -- i cover the internet names, not microsoft so i can't comment specifically on that one, but, again, like i'm so -- on valuation and this is just kind of a simple comparison, if we assign $75 per instagram subscriber versus 60 for twitter and that's after twitter has come down a lot and then we say, well, what is the rest of facebook trading at? its trading at 14 times cash flow growing at 40%, and the market is paying 12 times 16 earnings for disney growing at 10%. so i think, you know, we're not saying pick a multiple of revenue and hypothesize what the margin is going to be in five years. this is a company who has -- facebook, has 60%-plus margins today and on that basis this is still not a relatively expensive stock because it's growing so fast. google, you know, look, google we think the stock conservatively is worth $822 depending on what they disclose the investment losses are at $2 billion. if the investment losses are more than that or they call other bets, you know, the stock could be worth as much as $1,000. you're going to have to wait for february to get that information, but i think the bottom line is you do cash flow analysis, the stocks still could go further. >> nick, let me turn back to tech more broadly. you know, there are lots of sort of subsets within the technology area and the ones we've been talking about here are ones that i would call kind of consumer facing technology companies whether it's google, microsoft, which obviously has a lot to deal with the enterprise, amazon, apple and so forth. are there subsets in technology, we've seen a lot of deals in the semi-conductor area, semi-conductor manufacturing, so on and so forth. are there subsets within technology that don't look as strong to you? >> you know, right now you're right. there's a lot of things going right across the board. the semi-conductor index is back to the 200-day moving average because of the m&a this week. the short answer to your question is that there's -- technology is a very house-to-house search in looking for stocks and you have heard some good ideas here today. so anything that's generating strong revenue growth is a place where you can go, a place where you can invest. things that aren't generating that, don't fit the bill for the rest of the fourth quarter and i'd stay away from those. >> thank you very much, jason and nick for your thoughts. blizzard stock is also up about 70%. now the company is bamaking a b bet on e sports. not only do they want to play video games, they want to watch other people play video games. julia boorstin has that full story. >> that's right. activism blizzard announcing a division devoted to e sports and two big hires to run it. steve bornstein will be the division's chairman and mike sepso formerly president of major league gaming will be the svp. >> it's a $600 million revenue opportunity globally. the u.s. market is very small, a little over $100 million. most of it is corporate spop r sponsorship. you bring somebody like steveton think of other ways to monetize the business. >> in two weeks act vision's bliz con event will feature the global finals for games including star craft 2 and world are warcraft. gamers competing for more than $4 million in prizes. up until now youtube and twitch, which amazon bought for $1 billion, have been the main destination for watching video game play. with the number of e sports fans expected to grow from 116 million this year to 165 million in 2018 according to new zoo. the category is drawing more traditional media companies as well. just last month turner and agency wmeimd partnered to create a new e sports league. those competitions will air on tbs. >> julia boorstin, thank you very much. u.p.s. pilots this morning voting to authorize a strike. hard to deliver packages without planes, right? we're going to have that story next. plus, what do business owners need to hear from the presidential candidates? kate rogers is at a big conference in orlando as we speak. hi there, kate. what are you hearing? >> hey, mandy. that's right. we're hearing concerns over taxation, regulation, health care reform and more. we'll have more on that coming up next after the break on "power lunch." ffices. 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... what's up, tim? for all the confidence you need. td ameritrade. you got this. since the financial crisis, our economy has seen very low rates of growth. if elected, what policy changes would your administration implement to jump start our economic growth rate and create jobs? >> that was cnbc contributor steve odland with what he would like to hear from the candidates at next week's republican debate right here on cnbc wednesday at 8:00 p.m. eastern time. what do business people and entrepreneurs want to hear? for that let's go to kate rogers who is down at a big event in orlando. >> hi, tyler. that's right. we're here at the ink 5,000 conference. as just mentioned, we are just a few days away from our own cnbc debate. we asked these entrepreneurs what's on their mind heading into the election? >> taxation is always a big issue for us. anything that really frees entrepreneurs to be successful and makes it easy for us to do what we need to do, particularly around financing is helpful. >> the economy doesn't seem to be really moving at a clip that it needs to be and i don't think we have people who are very clear on having a plan about how do we take away barriers to economic growth and how do we actually support small businesses growing? >> health care is always a big concern, how much you pay and how much, you know, employees want and it's going up and they're going outside to get health care and it's hard to be a small business and not be able to provide all of that. >> we also heard concerns more broadly after the minimum wage and regulation as a whole and if it's potentially holding these private companies back from growth. you know these entrepreneurs will be tuned into our debate to see how the candidates tackle these very important issues. >> thank you very much and don't forget, and if you do forget you need to seek medical attention, cnbc hosts the next republican presidential debate. it is in colorado, boulder, beautiful boulder, october 28th. >> shares of u.p.s. are slightly down so far this year, and now the company is dealing with a potential strike by its pie llp. >> pilots at u.p.s. voting this morning to authorize a strike against the delivery giant. this is a 2,500 member independent pilot organization. it has been at odds with the company since 2011 over a new contract. today's vote means the union's board could formal lly request release from federally mandated negotiations with u.p.s. and then they could strike. both sides are scheduled to return to the bargaining table early next month but the union saying that could change. >> nothing is off the table on the time line of when we may ask for release, and like i said, the ball is in their court and the time is now to settle this contract with its pilots. >> for its part, u.p.s. says it continues to negotiate for a contract. it insists this will not impede service to customers for the holiday season. it points out its pilots are guaranteed at minimum more than $255,000 per year, and the union on the other hand says it wants better safety practices as it relates to fatigue and scheduling. so all of this as u.p.s. is gearing up for peak season. labor uncertainty is a risk that could cause customers to go elsewhere. and this is really something the union seems to be playing up, pointing to fed ex's recent ratification of a new contract with its own pilots. we'll have to stay tuned and see what happens. guys, back over to you. >> thank you very much. take another look at the big tech stocks leading this rally. amazon, alphabet, microsoft, and look at facebook trading above $100 a share for the first time ever. a nearly 3% gain. we want to know whether you think facebook may be overvalued. you'll have your chance to make your opinion heard at cnbc.com/vote. we'll present the results coming up on "power lunch." my name is mark amann. i'm a gas service rep for pg&e in san jose. as a gas service rep we are basically the ambassador of the company. we make the most contact with the customers on a daily basis. i work hand-in-hand with crews to make sure our gas pipes are safe. my wife and i are both from san jose. my kids and their friends live in this community. every time i go to a customer's house, their children could be friends with my children so it's important to me. one of the most rewarding parts of this job is after you help a customer, seeing a smile on their face. together, we're building a better california. welcome back to "power lunch." i'm mandy drury. here are this hour's power points. stocks rally after china cut interest rates, but the dow is off its highs. the s&p 500 however is now positive for the year. the u.s. oil rig count drops for an eighth straight week falling by one to a total of 594. and state street shares are at session lows after reporting a third quarter profit that was flat. the investment bank announcing plans to cut jobs of up to 600. and if you missed any of the big stories in the past hour, visit the site at powerlunch.cnbc.com. as we mentioned, a really big day for the markets. the dow adding onto yesterday's 300-point gain and the nasdaq getting back to that 5,000 mark and then some sitting at 5,035. the s&p 500 now positive year-to-date. we're all over this big market day. you're watching "power lunch" on cnbc. don't change the channel. welcome to today's working world. companies everywhere are working harder and investing more. but achieving the right outcomes has never been more difficult. xerox engineers a better way for people, process and technology to work together. improving how the world shops, travels, pleases customers, learns, banks, and stays healthy, so... life works better. work can work better. with xerox. 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. this huge news day is going to roll right into the next hour. we talk microsoft, facebook, and even china. microsoft shares booming, but has anything really changed at the company? we're going to dive in. plus, should you care about china's interest rate cut? yeah, it's a nice headline, but does it really matter? and an analyst on earlier this week says i got it wrong, and she is back to defend her case. mandy, also rolling on in the next hour as well. >> i'm rolling on in. okay. stocks are rolling on up right now on the back of china's rate cut. joining us from the floor of the new york stock exchange is kenny polcari with o'neil securities and peter costa. good to see you. kenny, it's been a good week. are we going to see thissex next week? >> the ecb, china, and next week it's going to be the fed because by all accounts the fed is not going anywhere in october and it feels like they're not going anywhere in december either. get prepared. it's tough to fight the fed or any other central bank so i'm looking for the market to continue to move higher. >> this is the danger when search on one side of the trade. it really feels like the market is not expecting anything out of the fed next week, so what if they actually move? >> i mean, that would be i think a shock. it would be a shock to me because i like kenny believe nothing is going to happen this year, but i am on the other side of that coin. i think that the market has been going up, you know, earnings have been just mediocre. we saw the tech earnings today which were much better. but as far as the overall tone and the earnings season, it really has not impressed me that much. i'm on the opposite side. i think the market has gone up. it's gone up very fast. it's very strong. i think this is a very tenuous position. >> yes, but does that mean the fed -- which side of the fed are you on? do you think the fed is going or not going? >> i don't believe the fed is looking at the s&p or the dow. i think they look at after. i don't think they look at it before. i think they're still looking at the data they have been watching and the data is not good. >> the data is weak. therefore, the fed will not raise rates. >> i'm on the other side of the market being this strong, not on the other side of the fed. >> peter, who do you think has the better chance of winning, tennessee tomorrow or the market over the next two weeks. >> i'm going tok out on a limb and say that alabama will win and cover and i'm a university of tennessee alumni and there's probably 327,000 alumni watching the show right now that will not speak to me for the rest of the year but the facts are the facts. alabama is just a great team. >> i don't want to be a debbie downer but there's always a flip side of the coin here, kenny. what's the biggest risk to the market? >> i think the biggest risk to the market is it's a little euphoric. we've had this great move up. it needs to digest it. any little negative data may cause some money to come off the table. i think the 200-day moving average is now becoming support. it's way down at 2060. we're way on the north side of that. in order to knock it off track, you're going to have to get some really negative macro data. that being absent, i think you see the market churn and then just start to inch higher into the end of the year. >> would bad macro data even matter at this stage with all the central banks around the world with pedal to the metal. bad data just means fed on hold for longer. >> you might see the market pull back a little bit. i don't think you will see a crash at all, and then i think you'll see the market because of what central banks are doing start to continue to move higher. i think we're going to get close to the yearly highs by the end of the year. >> kenny, the rigatoni with the eggplant sounded really, really, really good today. >> that's such a great dish. >> he toll that recipe, please. >> he stole your recipe. >> not my recipe. >> that's my grandmother's recipe. >> okay, italian boys. >> you settle that outside. >> thanks very much, gentlemen. what a week it's been for the markets and really so far a great month and that will wrap it for the first hour. >> it will wrap it for you. i'm sticking around for the second hour. i'm apparently rolling in. thank you very much. i have that visual, brian sullivan. over to you. >> i didn't know he went to the university of tennessee. my hokies are going to beat their buts in the battle of bristol next year. i can't wait. we're coming upp on 2:00 on wal street. the dow looking to end a strong week on a strong note. we're up 140 points. look at that. we're just now about a percent away from being positive for the year. happy friday, everybody. i'm brian sullivan. mandy drury is still mandy drury and she's going to join us for the second half of the year -- the second half of the show. we have a bunch. major milestones for three big stocks, ge, microsoft, and facebook, and let us do the first or the last first and start with facebook because the company's move above $100 per share makes facebook now the seventh biggest company in america by market cap. folks, it is now bigger than johnson & johnson, now bigger than wells fargo. so before we get to your guest, we want to ask you, america, very simple question, is facebook stock overvalued? whether you love the company or not is a different story. is the stock overvalued? yes or no? go to cnbc.com/vote to vote live. let's ask the same question to a pro, mark lehman joining us now. what do you think, mark? yes or no, overvalued, fairly valued, undervalued? >> i think it's fairly valued but it's also the best company and they're executing as well as anybody in the tech marketplace, so it's a must-own stock for portfolio managers and over time your viewers and shareholders are going to want to buy more facebook stock. >> what's going to be the driver? because the stock is trading at 18 times sales, three times the value of google/alphabet. what's going to be the pow they're continues to drive this already massive name? >> so they have lots of ways to win. an online advertising play that's acceleratinaccelerating. they will show ak celebrating metrics in that segment when they report their third quarter. they have huge engagement, okay? 1 billion people check their facebook page every single day. 1 billion people. the most watched event on tv is the finals of the world cup. 1 billion people watch that and 1 billion people check their facebook page every day. think about the power of that to advertisers. you also have other ways to win. instagram, which had 300 million active users at the end of last year, now has 400 million active users. they're growing over 35% in one year. you have oculus. you have lots of ways to win here and their core business, which is why you own it today, is still growing faster than the overall economy. >> what's the risk then, mark? all stocks, no matter how good they might be, have risk. >> so the risk there obviously is you have a slowdown in the global economy which a lot of people, a lot of pundits have been predicting for four or five years and we haven't seen that. you have a risk that the rates they're getting for some of their best products, best ads, are going to go down and i just don't see that. the other risk is valuation. this is not the cheap stock that others are, but i think it's one of those stocks that you find opportunities like we saw two or three months ago when the stock was in the 80s down from near $95 where you want to pick up more of that stock because it is executing better than any company we cover here at j and p. >> america slightly disagrees with you, mark. we locked in our live voting and as of right now, 55% of you, ant the voting is over, say that facebook stock is overvalued. 45% say it is not, mandy. that's darn close. >> i love it when america speaks. our next stock milestone is microsoft. it's trading at a 15-year high on the back of solid earnings. ed mcguire is an analyst who covers that stock which is up 10% right now. ed, do you think a jump of that magnitude is warranted? >> well, it certainly reflects the improved operating performance and the really strong organic growth of their segments. i think investors are finally coming around and realizing a lot of the changes that the ceo put in place a year ago are now bearing fruit and you can see it in the numbers. it makes sense to be rewarded. >> they're increasingly shifting to software and clous services but what about the hardware side? smartphone, windows phone, about 2% of the global smartphone market? >> yeah. the phone is an after thought at this point and it is fading away. i think the hardware makes a lot of sense on the surface side where microsoft is actually using the surface to restore some hipness to the windows software platform. so they actually have some real cachet with the new surface book and surface 4. maybe we'll see this drift into a surface phone in the next few quarters but i think they've written off the phone as an area they're investing in. >> you talk about microsoft getting the hip ps factor back, i'm excited about the holo lens. >> it's crazy. if you saw the demos, this whole concept of mixed reality is incredibly innovative. now, the question is, you know, how well -- how quickly will developers are able to write applications that are going to be usable in daily applications? but i think certainly when you look at virtual reality, augmented reality, this is some of the most amazing technology they have showcased. you go back to the kinect where they introduced gestural computing to gaming. it will take a little while for developers to catch up but it's very impressive. >> while investors might be happy about microsoft stock today, i'm sure there are a lot of people who will lose their job, 1,000 people to be exact, at microsoft in the neck round of job cuts. do you think there will be further job cuts down the line? >> microsoft has always done performance-based reductions and there has been a lot of, frankly, a lot of areas where they've invested where they didn't need to. so couldn't say that there's going to be a lot done. i think most of the phone restructuring is behind them and the realignment they did back in july was really kind of the major move that we're now starting to see some clarity come through the business, but they were definitely -- they definitely had too many people doing too many things not related to the core business at hand. we could probably see a little paring going forward but in the future i think what i'm looking for is more jar anyone more gim. >> the stock is only 6% high from its bubble high. >> bank of america merrill lynch raised their target on microsoft to 63 bucks, by the way, mandy. so they are super bullish on that name. your third big stock story on this friday, ge. yeah, the stock is not doing a whole lot right now, but it has been one heck of a month for the company which is one of the most widely owned in the world. shares are now up 17% just this month. and they are now nearing a level that we have not seen since august of 2008. let's bring in jerry cast telly ni who recently bought shares of ge. jerry, you bought the stock. it's done well. congrats, are you selling or trimming your position to lock in some profit? >> not really. in the business of buying stocks, when you find a real simple concept and you can see how others will follow, you tend to like to hold onto it and let it run its course. we think we're just early. there's so many things sitting behind this from everything level. it's a big name. it's underowned. it's going through massive restructuring. it's got an activist board many. all the things people seek out right now in an uncertain market. you can't miss them. i'm going to push back a little bit, jerry. you know i love you but you're calling this a simple story. let's be clear, this was effectively a hedge fund that made lightbulbs a number of years ago. they got rid of the finance division now get more into oil and gas. they spin off the financial part of it again, now own as symphony. what is ge? why would you say this is simple? >> sure. before the whole financial service cycle kicked in in the late '80s and i recaearly '90s,s at its core a high quality manufacturer. >> we thought it was and we found out they had a problematic finance division. >> right. they put so much effort over the course of the '90s and early 2000s in the financial services, it just didn't pan out. '08-'09 ended up making that a business that no one cared for and most importantly it was something that was probably going to drag by 30% or more the valuation of the overall business down. just moving as they are now from 40% to under 10% in financial services is going to unlock a valuation upside which we think gives it at least another 20%, 25% from here and that's before they get to come back and show some of the promise now in the more cyclical businesses that we think on a global basis still have a ways to go on the upside. i think it's more simple than it sounds and that's why i think we all should be focused on it here. >> this was a $60 stock back in 2000. obviously a long way to go to get there. you see another 20% to 25%. jerry, we're going to leave it there. it was a good purchase for you and your clients. thanks for joining us. >> thanks. >> china's central bank cutting interest rates for the sixth time in just under a year. the mo of is seen by many as an attempt to get that slumping chinese economy moving again. >> here is what they did. china carrying out, mandy, a coordinated set of monetary easing measures. cutting interest rates. it's reserve requirement ratio and lending rates. now, the overarching goal is improving china's lending environment by encouraging small to medium-sized businesses to take out loans and minimize the financial risks related to the companies with higher debt. these moves are seen as a positive for chinese banks, many of which trade in the u.s. if you take a look at com bank of china, bank of china, and a china construction bank, these are china adrs, names u.s. investors can invest in that are responding positively to the moves taken today. another step is removing the ceiling on deposits which means interest rates are now fully market based in china. t d securities says there's a higher chance it's currency will be included in the sdr currency basket. it would be a seal of approval for the chinese. so in general a very busy day for central bankers in china. >> oh, yeah. jim a moment ago was saying the fact that copper and crude are still down on the back of this chinese rate cut and admittedly we got the stronger dollar, shows there's a whole lot of skepticism about the effectiveness. >> it also suggests the numbers coming out in october may not be that good. this is a pre-emptive move taken by the chinese central bank. >> thank you so much. seema mody. >> as i tweeted out this morning, if the numbers were so good, why would they need to cut rates right now. china's move seen as good news on wall street, at least today, with the s&p 500 now positive for the year, the nasdaq back above 5,000. joining us now katy nixon, chief investment officer. we also have krishna. you have said this is a central bank world and we're just living in it. my point is if things were good, why would they need to cut rates. shouldn't we be a little nervous about this move rather th just slathering over the fact there's moreiquidity in the world? >> well, the outlook for global growth isn't that bad. we are growing at 3%, 3.5% type rate. it's just we're still slowing. so i think there's plenty to be worried about, but it's not the end the world by any measure. the monetary support, what it shows to the world is central banks are on the case and if things go bad, they will go out and do something really aggressive. that's what they have been doing ever since the financial crisis. >> i can see two of our viewers and listeners at a cocktail party. guy one, did you see china cut rates? guy two, yeah. >> guy one, what does it mean? guy two, i don't know. >> i happen to agree. it's a cenal banking world and central bankers are all in. 's a page out of the mario draghi playbook, whatever it kes. you're right, things aren't so good in china which is why they're being very proactive with the sixth rate cut in 12 months. it sends a message to investors that central bankers will do what it takes to stabilize economic growth d to try to inflate economy. >> but northern trust this morning when the news came out, they said, gee, now we really like stocks. you liked them before. does it add anything to it? >> it's not unexpect. we expected the people's bank of china would have to get more aggressive. we expected that the ecb would probably have to get more aggressive as well, although the tone of the announcement yestery was a little more dovish than we had anticipated but, no, it hasn't changedur outlook. >> krishna, for one of your clients who may own 300 shares of ge in a retirement plan, does this change your view or your advice to them about what they should do? >> no, it doesn't. as far as their perception is concerned, i think it does change things. if you go back to august and the fed wasalking about tightening and things like that, you know, they were very nervous and now the fed has passed, ecb is adding more stimulus, china is cuttg. so central banks are trying to support global economies. that's a positive message and those shareholders react to those positive messages. >> this could end in a variety of ways. you know you have the doom theorists out there, the people who say it's going to fine. the reality is nobody knows because we've never been here before. we're riding a wave of 32 global central banks who are injecting some kind of stimulus and/or added liquidity into their economies. is this going to just literally be a wave we should ride until it stops from a stock prot perspective? >> this will continue for a while, so, yes, jur suppoyou're to ride. that's what's been going on since 2009. not a whole lot has changed. it's been different players coming into the easing mode, so as an investor, you are supposed to take advantage of this central bank action and that means owning equities, owning risky assets. when you have corrections in the marketplace like august, you have to go in a bit more. >> last word to you, katie, what is the big thing you are watching now? >> we continue to watch china closely. that's been a key contributor to global risk aversion and global risk appetite. it's probably the a number one thing we focus on and our biggest risk case scenario is a hard landing in china. just to tag onto what krishna said, i agree it's a risk on period, but eventually fundamentals do have to show up. >> earnings season hasn't been terrible. we'll get to that next interview. thank you both. go to powerlunch.cnbc.com -- you know what it is. see how krishna is playing the central bank easing around the globe. that's powerlunch.cnbc.com. i've only said it a million times. you'd think i'd have it memorized by now. we have a lot more to do, including the big opportunities in the friendly skies. top airline picks. plus one analyst who said she got it wrong earlier in the week but is coming back to make her case for skechers. and later, the rich get richer. and the story of a man who today briefly became the world's richest guy, knocked bill gates off the title, but now gates has taken it back. we'll tell you who that was coming up. plus one analyst who said she coming up. my name is chris hughes and i am a certified arborist for pg&e. i oversee the patrolling of trees near power lines and roots near pipes and underground infrastructure. at pg&e wherever we work, we work hard to protect the environment. getting the job done safely so we can keep the lights on for everybody. because i live here i have a deeper connection to the community. and i want to see the community grow and thrive. every year we work with cities and schools to plant trees in our communities. the environment is there for my kids and future generations. together, we're building a better california. welcome back to "power lunch." i'm brian sullivan. hope you're having a great friday. we're starting to get fresh signs that october is shaping up to be rock-tober. in the car lot phil lebeau is joining us. you have fresh information on how good car sales are. tell us about it. >> brian, this comes to us from j.d. power and lmc automotive. they track the auto dealers on a regular basis and what they're seeing so far in october, strong sales. in fact, the pace at 17.3, but the real news is that lmc has raised its guidance for full year 2015 auto sales. any now believe that the sales will come in at 17.3 million for the full year. that's an increase of 100,000 vehicles. there you see on the wall there what auto sales have done going back to 2009. and when you look at october specifically, a couple things stand out. strong pace of sales at about 17.3 million just for the month of october. trucks, however, up 15%, and when you look at cars and suvs, they are almost two-thirds of all vehicles when you're talking about retail sales, and it's been a heck of a month for the big three auto stocks. take a look at what they have done. if you were in general motors back august 25th, brian, you were down around $28 a share. now you're up over almost $36 a share. a gain of more than 30%. it's been a heck of a move over the last month and a half for the big three auto stocks. >> phil, any indication of how vw is doing? >> no, no indication. we know that they're throwing big incentives out there. you have probably heard the ads in their market. they're throwing a lot of money out there to make sure that they can still bring people into the showroom. >> phil, thank you very much. >> let's move from the car lot to the clear blue skies with american airlines lower despite reporting an earnings beat. let's bring in jim corridor, an airline analyst at s&p iq. what gives with the stock? >> investors and analysts are clearly concerned about unit revenue performance at the airline. there's a lot of questions on the conference call today about the strategy toward competing with low cost carriers. that seems to be what's weighing on the stock right now. investors seem to be ignoring the strong revenue and earnings numbers the company put up and what we think is a really good pick for the airline. >> you've got strong buys on a number of others like delta and jetblue and buys on unites, southwest, and spirit. sounds like you're bullish on the sector. >> their biggest cost category, fuel, is down 35% to 40% which is driving record profitability. they're using the money to buy back stock or lower debt and restructure balance sheets. what we're looking at is an industry that's fundamental lly healthier than it's ever been and it's a much more viable industry and attracting a different class of investors. >> if a lot of your bullish view is predicated on low oil/jet fuel prices, do you think that's going to continue? what's your view on where oil and jet fuel prices go from here? >> so brent crude has averaged $55 a barrel so far this year and if we look at it today, obviously it's lower. the fourth quarter fuel cost picture looks better than the third quarter right now. there's no catalyst on the horizon for oil prices to go back up, but if they do airlines will adjust their capacity and pricing structures because they're a more nimble industry due to mergers and consolidat n consolidatio consolidations. >> jim, thank you for joining us. >> thanks. tech titans posting strong earnings and that's creating a lot of wealth for a small number of people. robert frank joins us with that story. >> a lot of wealth is right. the founders of those three companies you mentioned added a combined $8 billion to their wealth over the past 24 hours but it also helped bill gates fend off a new challenger for the title of richest man in the world. we'll tell you who that is and do the billionaire shuffle right after the break. welcome back to "power lunch." the maker of north face vf corp missing earnings estimates on top and bottom lines. the company said it's full year profit will fall short of estimates. the stock is down by 13%. the maker of inadvice si line reporting its earnings with the company revenue exceeding estimates. the stock is up 37% over the past year including the 11% pop in trade today. and state street announcing it will cut 200 to 600 jobs after reporting its earnings. the company also announced a multiyear restructuring designed to save $500 million per year. the stock falling by just over 3%. today's big tech stock run, a few tech billionaires bake even more billionairistic but for a few years there was a new world's richest man who pushed bill gates off the top spot. cnbc wealth reporter robert frank is here to tell us, this is a really cool story. for a cup couple hours name the that was richer than bill gates. >> bill gates went to sleep as the second richest man in the world. he woke up back at number one. as of last night the richest man in the world was this guy, armancio jortega. he hit $78.5 billion that pu surpassed the $78 billion that gate had, but this morning jor tay ga dropped a billion and gates added more than a billion. gates waking up back on top still the richest man in the world. the other tech tycoons also added to their billions over the past 24 hours. jeff bezos is now $3 billion richer than he was yesterday putting his total wealth at $53 billion. he's now past the koch brothers to become the third richest man in america after buffett and gates. the google guys or the alphabet guys both got a billion dollars richer. they're worth over $36 billion each. postscript here, steve ballmer who owns more microsoft than gates does, he added nearly $2 billion to his wealth which would basically pay for the l.a. clippers. not bad for one day's work or in his case, one day's retirement. back to you. >> wow, paid for the clippers on one day's stock move. >> exactly. >> that's great. up next, one analyst calls a stock a slam dunk, a body slam dunk. we'll give you that name ahead. but first the final oil trades are crossing for the week. the crude close is coming up. you'd be crazy to miss it. ideas are scary. they come into this world ugly and messy. ideas are frightening because they threaten what is known. they are the natural born enemy of the way things are. yes, ideas are scary, and messy and fragile. you'd be crazy to miss it. they become something beautiful. i'm sue herera. here is your cnbc news update at this hour. hurricane patricia is now the stngest storm ever measured. the white house says it is closely watching the development of the storm and is in close communication with the government of mexico. the storm is expected to hit mexico's pacific coast later today. at lea people were killed when a truck slammed into a bus carryin retiree on a day trip in the french winecountry. four others were seriously injud. it's the deadliest accident in france in 30 years. french lawmakers holding a moment of silence for the victims while the leaders pay tribute to the victims. the entire fairfield, connecticut, school system was placed on lock don after a man called an elementary school threatening to go to the school with a rifle. shortly after, two high schools received bomb threats. officials believe the calls were connected. the first eve harry potter play will be a magical sequel. harry potter and the cursed child will center on adult harry potter and his son. it begins where j.k. rowling's books ended 19 years after his battle with the evil lord volume demort. previews in london on june 7th. brian, bk to you. >> i heard he's now goinged a harold potter due to his advanced age. >> apparently he got some boring 9:00 to 5:00 job and three kids. >> he's at the ministry of magic. something like that. >> looking blankly at the screen. >> harry potter goes to government. let's get to bertha coombs. rescue us, bertha. >> if you are long oil, you probably would like to turn to the ministry of magic. no magic in the oil trade these days right now. we are just slightly above the final trade which was right at around $44.59. that's sitting right at the 50-day moving average despite the fact that we had that big move from china which normally does rally the animal spirts in the crude pits. not today. we had the dollar strengthening. that was a bigger headwind. for the week, crude down 5%. second straight weekly decline. >> bertha, thank you very much. every day we dig through analyst research to find the five stock calls that stick out the most to us. we call it "street talk" and what's so funny? >> i was looking into the wrong camera. >> that's already. it happens. you haven't done the 2:00 show in a while. there's only two choices. first up is equifax, ef x, stifel nicolaus upgrading it to a buy. they make a recent deal they made. they say a big government contract in the uk and a deal here with fannie mae will sustain growth for the company. they set a price target of $120 a share. 15% upside. >> the second stock is pandora. this stock is facing a few down grades following its earnings report. it was cut to underweight at albert freedman who lowered it to 11 bucks from 24. it's currently sitting there at 1255 and it was also downgraded at, you name it, it was downgraded. >> everybody. >> bank of america, pacific crest, oppenheimer's. the stock is down 44%. >> better late than nothing, analysts. i'm going to give a shout out to amy yong, cut the stock to a neutral. everybody else is completely wrong on pandora. stock three, raytheon. cowan and company reiterate this as their top pick in defense. they raised the price target to $130 a share. about 10%, 11% upside. he said improved bookings and untapped financial fire power. >> not a huge impact on the stock. only up by half a percent. this one is the fourth stock, called net gear. if you're wondering what they do, they make equipment, right? >> not gear for nets. it's not a fishing company. >> internet equipment. for example, you have a wi-fi dead zone in your house, you can get a range extender made by net gear and it will apparently cure those wi-fi dead spots. raymond james giving this stock an upgrade. look at that. to outperform from underperform. big upgrade, 28% pop today. the target is 39 bucks. again, that's below where it is now which is interesting but it does imply about 20% upside until today. the stock was down year-to-date until today but with the massive move it's now got a year-to-date gain of 18%. >> listen, a lot of executives selling in the summer. look in july, sell, sell, sell. maybe today they regret it. toot the under the radar name is the least under the radar name is world wrestling entertainment. everybody knows about the company. fbn securities starting coverage of the stock with a $25 target. that's 30% upside to where it is right now. they assume that wwe's network and pay per view will go from 1.1 million subscribers to 1.5 million next year. they say the w. -- i was shocked 1.1 million subscribers to the wwe network or their pay per view events. that's a lot. >> that's a lot. well, today it's gaining a lot. 10% pop. >> we wrap up "street talk" on a friday. if you missed any of these calls, generally we try to post it to my sort of semi new facebook page. go to facebook.com/sullycnbc. cheap plug. we go to "trading nation." which stock could be a first to hit $1,000 a share? stacey lbert, rich ross. sta stacey, i know you're an options expert but let's have a little fun. who might be the first to hit $1,000. >> i agree with you. this is a fun question. so there are a couple different ways to look at it. google has definitely been much more vocal about never wanting to split its stock share price. if we take that into account you have to default and say google is more likely because amazon has a higher probability of defaulting to a share price stock split. so now let's look to the options. if we look to the options market, obviously the move to $1,000 is only about a 40% move for google where as its a 65% move for amazon so that's going to be taken into account. if we kind of adjust that for the volatility in the options market, they get to be fairly similar probabilities here. i would have to say at the end of the day if you assume amazon won't split its stock price before, it's a coin toss. >> price doesn't matter that much. if i had a $1 stock and did a 1 to 1,000 reverse split, i would have a 1,000 share company as well. technically amazon or alphabet, which one looks better from a technical perspective? >> i'm with stacey on this one. while we love technology, both amazon and google, i'm going to go to google today. let's bring up the shorter term chart. this is where it starts. i can get you to $850 simple. you see this decisive breakout on earnings from that rounded base of support. you take the height of the pattern, $100 roughly. you project it out from the neckline of $700. it brings you to $800. we could take the height of the move into the pattern into $1.50. where we might get to the magical $1,000 level is the weekly. let's look at that. what we see is the classic stair step pattern. we see a very strong trend channel followed by a period of sideways consolidation followed by another trend channel and even more consolidation which we've just emerged from in decisive fashion which sets us up for another well defined trend channel higher. i think that could take us up to $900, $950. once again i like google here. i'd be a buyer of the stock. >> classic stair step pattern. rich ross, thank you. stacey gilbert, thank you. for more "trading nation" head to our website, "trading nation." cnbc.com. >> i like a good stair step pattern. coming up next, the big opportunity under your bathroom sink. we're not talking about mold. the one stop that one top analyst says you should own and as we head to the break let's look at some of the names that might be in your portfolio. microsoft up 11% and alphabet formerly known as google up by about 8%. "power lunch" will be right back after this quick break. thanks for staying with us here on "power lunch." i'm mandy drury. let's take a look at the markets because we're currently sitting at session highs with the dow gaining by over 1% along with the s&p but the real star percentage performer is the nasdaq. tech is the winner today. currently over 5,000 for first time since august 19th and a gain of 2.5% right now. so a very good day for all three indices. shares of drugmaker valeant are bouncing back today after tumbling more than 30% this week. today they're up by nearly 8%. meg terrell joins us once again. the company is holding a conference call on monday. what exactly are we expecting to hear? >> they're holding this conference call with ten members of its board and its management. of the board including members of its audit committee and former cfo howard schiller saying it will address allegations into its accounting practices, its relationships with specialty pharmacies, and allegations of channel stuffing which valeant, of course, says contain numerous errors and inappropriate speculation. what investors and analysts will be looking for is a reason to trust in this management again, a reason to believe that there's credibility here. as an example of some of the research that's going around, there is a 62-page slide deck that came out from evercore isi demystifying philidor and r and o. it's really going to be a very important morning for valeant to regain investors' trust. >> meg, thank you very much. big day for the credibility of the company. let's talk about another one of america's most widely owned stocks, swiffer maker p & g. john, let's be clear, p & g's numbers came out and it was a sales miss, correct? >> no swe. >> okay. what happened? >> well, what's happening with proctor is they have a lot of raw material exposure which in dollars is very favorable but when you're selling things in other currencies around the globe, they have to take a lot of pricing. they're losing market share. it's that simple. >> was it that they were selling fewer of certain items or making less in the currency conversion on the same amount of stuff. >> the margins went up. what they're doing is taking a lot of pricing. we're seeing the volumes go down. the units are down year over year. what they decided to do is hold onto more profit while selling a little lets. they've been more margin focused. some of their competitors have been more top lined focused. >> this is a widow and jor fon stock. supposed to buy it, forget about it, give it to your grand kids. slow and steady. stock is up today but is it's had a terrible year. is it the same as ten years ago, five years ago? >> none of these consumer companies are the same. they're more global. >> it's harder to understand though. >> it's harder to understand them because the dollar has been so volatile over the past couple years. and also it's tough to have transparency in terms of what's going on in russia. their revenues were down 8% in china. that's hard to imagine just a couple years ago. the world has gotten more complicated and more xet s competitive. >> i asked the cfo and i said is it more difficult to forecast now because of the currency swings we've seen, the euro, the yen, and he basically said yes. so are we able to trust the company's forecast to a point? i don't mean distrust them as people. i just mean if they don't know, who knows? >> he basically said on the conference call they were going to hold off on giving new guidance for a little while until they saw what was happening. i think, yeah, you could say that you have to sit there and say i think they're giving us the best information, but i think most of these companies, they can't really predict the future. if the dollar stays where it is, i think we've got a good idea of what they're going to aesh and after a tough year over the next six to nine months, the currency rolls off, earnings growth will accelerate massively for all of these consumer companies and they're going to be really good stocks once that earnings growth comes back. >> bottom line, is it worth our viewers' money? >> i think it's worth the money here. i think you will see a company that will get the top line moving in the right direction, great focus on margins, and, again, as the negative currency impact rolls off and that's double digits right now, we're going to see a big return to growth and investors haven't owned these stocks for years. big mutual funds. i think you will see them come back in and the stock will work. >> john, it was a pleasure. >> thanks for having me. >> skechers getting kicked hard right now in a big earnings miss. one analyst told us earlier this week to buy the stock. is she still sticking with that call? we'll find out. she's here and stocks at session highs. most of the dow is up. we are headed for one of the best weeks in a long time for the stock market as we march back to break even year-to-date. we're back with more "power lunch" right after this. the side effects. hey honey. huh. the good news is my hypertension is gone. so why would you invest without checking brokercheck? we're back with more "power check your broker with brokercheck. sketchers taking manager hit after reporting weaker than expected quarter sales. that stock is down 34%. she expected a strong quarter from sketchers. take a listen. >> they are aer putting some very strong top line numbers. for tomorrow we're expecting 30% top line which breaks down to 25% in u.s. and 50% internationally. so it's very hard to find companies with strong top line momentum. they're also putting leverage also on their operating expenses which is dropping down to the bottom line. we think strong earnings numbers for tomorrow. >> i suspect while most analysts would be hiding under their desks far from a cnbc camera korina is back with us. a lot of analysts would say i meant to say -- you're here, thank you. what happened and are you still sticking by the stock? >> we are. we're sticking with t we kept our price target, we kept our out earnings numbers. in fact, we also kept our fourth quarter number. we were a little bit below the street before. why do we like the story still? >> it is still an international growth story, china could be a billion dollar market for them, they are $200 million of that this year. the comps are surpassing the rest of the group. very strong price increases at 6.8% and the backlog is very strong at 28%. >> so i would imagine if you like the stock on wednesday it's 35% cheaper than wednesday, do you love it now? >> we probably wait for the dust to settle, there is a lot of turnover, probably frustrated holders, we would probably wait until tomorrow to dip our feet in. we do still like that our price target is $50. >> is it a victim of its own success? >> the stock is up 64% this year. it's not like sketchers shareholders have been wiped out. if you bought the stock yesterday you've been whacked. is the fundamental story still intact or did something change meaningfully with the conference call last night? >> no, in fact, the top line grew 27%. we were looking for 30%. so part of that miss was due to fx, so 10 million of that was fx, the other half of that miss or shortfall -- but 27% still a strong number -- the other half of that shortfall is from lack of wholesale orders that they were expect to go come in at the end of september. if you look across the industry today we are seeing a lot of inventory concerns, a lot of people are talking about how the wholesale business and footwear in particular is slowing a bit, partly due to weather, partly due to fashion. this is not a sketchers specific trend, this is an industry wide trend and sketchers ask taking the brunt of it. >> duke that the wholesale inventory deal that did not come in may come in the fourth quarter. >> we are expecting them to make up that order. their inventories are up 37%. they have indicated they have orders for all of that inventory. let's not forget that they also have more retail stores this year than last year and are taking on a little bit more risk of their own. >> corina freedman we appreciate you coming on the program. if you want to know what b. that order corina just talked about, david wine berg the ceo of sketchers is on with jim on mad money, 6:00 p.m. eastern. it's down stood but still up 56% this year. foreign exchange, big orders getting missed, trends, whatever, with david tonight with jim. >> up next, the two stocks that really stood out to us this week. 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ask your doctor about cialis for daily use. for a free 30-tablet trial go to cialis.com mandy drury with brian sullivan time for our stocks of the week. my hick is mcdonald's. that stock is up more than 6% this week. nice pop again today. this week it hit new highs. we also got an upgrade from papa jeffrey today, the stock went to overweight and they upped the target to 130 bucks from 95 classic turn around story. >> is it a turn around story? >> it is. >> what's turned around? >> earlier in the year we were bringing our hands, there was a food safety scare in china, that hurt, then the menu is not good enough, the healthy choices aren't working. they've completely revamped the menu, they've gone to an all day breakfast. so mcdonald's is doing well. >> all right. my pick is ebay. this has proved the doubters wrong, a huge week for ebay, they boosted their forecast, the transformational process still in the early hours, ebay, another big week, up 15% in one week. >> for all those who say that with the spinoff of paypal as a growth engine it would be the death of ebay. no. >> they can bet on mcnuggets. >> tons of earnings, a fed decision on wednesday and wednesday night is the gop debate hosted right here on cnbc. that is a week. how do you position yourself for next week? jeff kill berg and steve masocka. big week next week, earnings, the fed, the debate. what are you focused on? >> well, i think the fed is largely going to do nothing, i think you've got to focus on earnings. there's umpteen companies reporting next week, my guest is if it continues like we have seen so far is it it will be okay, not great, but okay. what china did today and what mario draghi did yesterday, interest rates seem like they will stay low for a long time, i think that's good for stocks, that's why we had this big rally this week. i think we are a little overbought this week, but long is the way to be and seems to me like this low interest rate environment continues to go on forever. my guess is the market will continue to grind higher. >> do you agree with that jeff? do you think we are looking a little overboard at this stage and maybe a pull back may not be out of order for next week? >> i agree with steve, he brings up a great point. we are going to be fees focused on the fey but this momentum was ignited on that weak jobs now and now they're seeing follow through from mario draghi. kind of like jumbo shrimp, we see another stall period for the fed but we are looking as a consumer next week, looking for follow through. >> steve, very quickly, your one big concern right now is? >> that we have -- continue to have deflation. that is why you're seeing all these central banks lower rates, put more money to work. we have worldwide deflation, they're trying to export it to the u.s., that could be a big problem. >> jeff and steve, we will leave it there. now the patriots are back to 5-0 and the balls have been checked. thank you very much. just a reminder, we host the next presidential gate wednesday life from boulder, colorado. there is two debates, the small one and big one. >> and also fed day which is huge for. >> you yes, it is. >> hello. >> thanks for hanging around. >> i hung around. i enjoyed it. thanks for watching, everybody. >> "closing bell" starts now. welcome to the "closing bell," everybody. i'm kelly evans at the new york stock exchange. >> i'm scott walker in for bill griffeth again. the nasdaq the biggest leader today, the tech heavy index being powered higher by strong numbers from amazon, google and microsoft. we will break it all down for you coming up. >> now the pressure is on for apple next week, the iphone maker set to report its results come tuesday, we will debate whether the tech giant can beat expectations. >> and china cutting interest rates for the sixth time since