Transcripts For CNBC Power Lunch 20151120 : comparemela.com

CNBC Power Lunch November 20, 2015

Tanked the stock in disney is up almost 20 now over the past three months. We begin this hour though with those deadly attacks. This time in mali in north africa. A hostage situation in a luxury hotel in malis can tpital is n over but more than two dozen are dead. The death count in the paris attack has risen. Michelle carusocabrera is live in paris with the details on both of these developing stories. Michelle . Reporter and, tyler, belgian authorities confirm one of the dead is a belgian diplomat among the numbers you mentioned just now. This all comes after gunmen took over 170 people hostage in the early hours this morning. At this point no groups have taken credit or confirmed credit for that attack. Here in france the french are wondering to what degree what happened in mali is related to president Francois Hollande very aggressive policy in north africa when it comes to combatting jihadists. There have been french troops in the country since 2015. Mali is a former colony of france. Back here in paris it is now one week since the attacks. The death toll has risen to 130 and there are recriminations, back and forth, who is to blame, why did this happen, and we spoke with one member of parliament today, right wing member of parliament, former member of nichololas sarkozys government and he pointed a strong finger at the United States. We are paying the cost of continuous american disastrous policy in the middle east for the last 15 years. Reporter what about Foreign Policy under barack obama . Same thing, unfortunately. The hesitation, the twists and turns and the absence of leadership have created a void in the area. Im very, very angry because everybody has been very poor in conducting policy in the middle east in the last three, four years. We have have oour part of responsibility but i think were also paying the consequences on the part of the several u. S. Administrations. Reporter he was particularly critical of george w. Bush for letting iraq fall apart, letting iran have too much influence in iraq as well. He thinks there needs to be much more aggressive coordinated action amongst russia, the u. S. , iran, and france to deal with syria and to deal with the crisis thats going on in syria which he believes leads to the creation of the Islamic State or caused by the Islamic State, tyler. Michelle, thank you very much. Michelle carusocabrera for us tonight in paris. The attacks today highlighting the harsh reality once again that there is not a whole lot that businesses can do if gunmen, terrorists, show up with guns and suicide belts. But there are some steps that businesses can take to deter terrorists before they strike. Eamon javers is in washington with more. Hi, eamon. Reporter hi, tyler. Weaver been out here all day talking to shoppers as they go about their daily business and all of them, every Single Person weve talked to, have said they feel safe but they are paying a little bit more attention to their surroundings, whats going on in the area around them, and that dove tails with we obviously have lost eamons transmission there from bethesda, maryland. Well check back with him over the next few minutes and see if we can patch that back together. Lets go down right now and check on what the markets are doing. Major moves up for the dow and other indexes and lets check in with bob pisani at the floor of the new york stock exchange. Hello, tyler. Were just off the highs for the day, but its another strong day for the markets overall. I want to put up the markets this week and remind everyone at this time last week before the paris attacks we were down about 3 for the week. Right now put up the full screen here. S p 500 is up about 3 for the week. This is one of the best weeks weve had in a very, very long time. Russell 2000 up 2. 6 . Germany is up 3. 8 for the week. Even france up 2. 1 . China has also had a pretty good week. One of the reasons were doing so well today, nike had very good numbers but also ross stores had very good numbers. The discounters have had great numbers this week and that has allayed some of the fears in retail. Remember the horrible numbers we got from the department stores. The other companies are not that bad right now. Here is what happened with ross stores. Not only did they report strong numbers but tjx had strong numbers. Ross samestore sales up 3 and they had good traffic. Traffic was actually up. Not people not coming, people were coming so the discounters at least are holding up pretty well right now. Elsewhere let me just switch off a little bit, another tough day for ipos here. Remember how much trouble we had this week. Duluth holdings, the maker of buck naked underwear did price at 12 so the range was 14 to 16. Truck hero didnt make it. They postponed. Noble midstream also didnt make it, they postponed. Two out of three couldnt even make it to market. What we did get to market is holding up pretty well. Duluth did go to market at 12. Its trading at 14 now so thats up nicely. Match group second day in a row its up. Square which priced yesterday at 9 and had a great day is trading was trading up and has now moved into negative territory on the day. Let me just show you alibaba and note for you that alibaba has had a pretty good week, its up about 6 . 3 today. And some of that may be people buying ahead of alibabas inclusion in some big indices. Msci on december 1st is going to be including alibaba and 13 other china america listed stocks. That means more china in the global indndices. Next hour well be talking about investing in china and what this may mean for your portfolio. Guys, back to you. That msci news big deal for the stocks involved. Thank you very much, bob pisani. Lets get to Brian Sullivan at the nasdaq with a news alert. Hi, brian. Mandy, how are you doing . Its the weekly rig count numbers by baker hughes and we lost ten oil rigs. The rig count down ten week over week. Natural gas rigs by the way stayed flat. Nat gas likely to stay under pressure. Wti crude not moving on that. The rig count is down but the market clearly waiting to see a decline in production. Yes we lost a couple hundred thousand barrels a day in america but the rest of the world has more than picked up that slack. Were still pumping 1. 5 to 2 Million Barrels of oil a day. The rig count is declining but its not impacting the ovmarket. If i keep doing this, im going to call myself old man and the sea drill. Oil did dip below 40 the back of doms head. Im watching right now because im trying to follow this rig count data but also watching whats happening with shares of alphabet. Theres so much going on here. We made steady gains up for alphabet. This google announced its going to hire diane green to run its Cloud Business in an effort to take on the industry led by amazon with amazon web services. The stock is up 5 . So alphabet shares certainly one of the large cap tech ones to focus on, tyler, given whats happening overall with this market rally. Like you said, a very big one, one of the best moves for the week weve seen all 2015. Fantastic, dom. Thank you. Lets go back to eamon javers who is following what businesses can do to protect themselves against the possibility of assault. Eamon . Reporter yeah, thats right, tyler. What the Security Experts tell us is that there are opportunities in the planning stages of a terrorist attack for businesses and regular folks to step in and actually interrupt a terrorist attack thats in process as its being walked through the planning stages starting with the very simple act of acquiring supplies. They say a lot of times thats an opportunity to step in for Law Enforcement and civilians to interrupt the terrorists before they have the opportunity to strike. Also impersonation is something that they see in a lot of these Different Cases where the terrorists will actually go and get an ambulance drivers uniform or a Police Officers uniform, stealing those can be an indication of a larger attack that might be in the works. Also rehearsal. The entire Team Sometimes will go and look at the venue, case the venue before they go operational and finally the deployment stage is one where theres a lastminute opportunity here for civilians and Law Enforcement to interrupt an attack before the damage gets too far out of hand. So all of those opportunities. And what the Security Experts tell us is there are lessons to be learned from Israeli Security which has been doing this for a long time. Take a listen. Instead of just having passive security guards who stand still, to engage in conversation, to move around outside of a sports venue, outside of a shopping mall, and engage with people and by doing this youre not offputting shall youre not menacing, youre instead just probing a little bit. Reporter so the idea here, tyler s that youve got to be very proactive. Even the profession security guards have got to be moving around the venue talking to people, finding out their stories, asking them what theyre doing here in a very friendly way but thats the opportunity to spot something that seems untoward and thats the opportunity to do something about one of these attacks before the terrorists have the opportunity to do something really disastrous, tyler. Thank you very much, eamon javers outside of washington, d. C. The fed has hinted that a december rate hike is likely, but our next guest says while the u. S. Could handle a quarter point rate hike, the worlds markets, well, not so much, and our guest is our friend ron insana, cnbc contributor. He wrote about this on cnbc. Com. It is unusual. One would think that potentially the European Central bank would be loosening up. And mario draghi indicated that today. And putting more money into the system going the other way. A rate hike in the United States, is that going to hurt markets around the world . Well, you know, so far we havent seen that response but what worries me, when you look through the minutes of the feds last meeting they raise a couple issues. Number one, is there going to be an intervening shock between now and december. Weve had one or two. Then they talked about overvaluation of commercial real estate. Spreads widening and so sometimes when you raise rates in an environment where there is some stress, not distress, but stress in the credit markets, that could exacerbate that problem. I think were going to find out if theres overleverage in the system if and when the fed starts to move. If they go in december, that might be the point at which we find out, you know, as Warren Buffett once said, who is swi swimming naked when the tide comes out. While geopolitical risks may have heightened, the markets have actually calmed down. And some people are suggesting, okay, so weve gotten the uncertainty of liftoff out of the way and everyone assumed that rate hikes in the future will be gradual, the path will be shallow, but it is a big change relative to the rest of the world. We are going one way, the rest of the world is going the other, and so we have to see whether that pretty much the only major economy in the world that is maybe the uk will go in 2016. There are particular markets or regions that would be affected more greatly by a regime of rate hikes, not just one. Certainly emerging markets. The strains on currencies would become more evident. What also caught my attention was the flattening of the u. S. Yield curve which is not necessarily what the fed would have wanted if its indicating that rates are going to go up. It would be a reflection of a stronger economy. The yield curve should steepen in that scenario and instead short rates are going up faster than long rates and so were seeing a flattening which again could portend either an indication of maybe weaker growth expectations down the road, certainly inflation is not maybe the bond market is thinking differently and the bond market tends to lead stocks when it comes to this type of environment. No cataclysm, but something to watch. Have a good weekend. Lets go to jane wells with breaking news. Hi there, jane. Reporter hi. Mandy, one of the most contested lawsuits between two of the largest commodities in agricultural in this country in federal court is being settled. The sugar farmers and the High Fructose Corn Syrup refiners are saying they have settled their fouryearold legal battle. The terms are not being disclosed, but this was a 1. 6 billion lawsuit and counter lawsuit. The sugar folks first sued the corn syrup folks for marketing themselves as being natural and sugar. Then the corn syrup and the refiners counter sued saying it causes obesity and cancer. Very contentious. The sugar folks had brought in highprofile attorney mark lanier to litigate for them but they are announcing this morning they have reached a settlement. The parties continue their commitments to practices that encourage safe and healthful use of their products including moderation. We do not know the details, but this fouryearold battle is going away. Why am i standing in an al mand orchard . Ill explain that later. A bit of a sticky situation. Rents through the roof but is relief on the way for the American Housing market . We have new data you have to see. Plus, nike shares are soaring. Its the best performer in the dow this year but what could happen to Consumer Discretionary stocks when Interest Rates begin to rise. Morgan brennan has some clues for us. We crunched the data and one of the years Top Performing industries in the sector could turn out to be the biggest losers when rates begin to rise. We will have that run down when power lunch returns. 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. Power lunch returns. Every insurance policy has a number. But not every Insurance Company understands the life behind it. For those whove served and the families whove supported them, we offer our best service in return. Usaa. We know what it means to serve. Get an insurance quote and see why 92 of our members plan to stay for life. I love working in the salinas area becauseriselda zendejas. I always wanted to do something where i could help people around me. So being a construction supervisor for pg e gives me the opportunity to give a little bit back to my community. I have three boys. Theyre what keep me going every day. Our friends, families live in the area. And it is important for all of us that we keep our community safe. Together, were building a better california. Its gotten squarer. Over the years. Brighter. Bigger. Its gotten thinner. Even curvier. But whats next . For all binge watchers. Movie geeks. Sports freaks. X1 from xfinity will change the way you experience tv. Welcome back to power lunch. Im mandy drury. Tesla recalling its entire fleet of model s sedans to check the front seat belts after a passengers seat belt became disconnected. The stock has pared losses. Its down by 1. 7 now. Abercrombie fitch soaring 24 with the teen retailer easily beating profit estimates and revenue also beat. Footlocker topping estimates as well. Reporting a jump in statementstore sales. The shares responding up by 5. 5 . Lets get to the front of doms face now for a market flash. Hi, dom. It is the face this time. Lets talk about a followup on some of those retail names. A lot of those movers today but one thats under the radar, its a chinese company, called vip shop surging by 11 . Its a chinese Online Discount retailer for things like apparel. On wednesday the Company Reported quarterly profits that more than doubled and said it would buy back more than 300 million of its own stock. Its lifted shares by 17 over the course of the past week. Thank you very much. To the American Housing market we go and renting a home, never been more expensive, but are we finally seeing some relief, some flattening in the way rent hikes are progressing . Diana olick is in washington with more. Hi, di. Reporter hi, ty. Well, there are signs of relief coming. Are we there yet . No. But take a look, rents in october were 4. 5 higher nationally then they were a year ago. Thats still a bigger gain than is historically normal but compare that to 5. 3 annual gains in september and 6. 6 gains in july when rents hit their highs. The gains are shrinking. Why . Well, its all about this, new construction coming online now and coming in 2016 when this building will open with over 200 units for northwest d. C. While Single Family construction has been recovering very slowly, multifamily has been where the developer money is. The number of apartments being built this year is more than twice what it was in 2009. Developers making up for lost time during the recession. There was concern that the sector was overheating but we are starting to see multifamily starts come down. Weve also seen high relatively sales by reits. Last month sam zell agreed to a deal with starwood cap tool group to sell 23,000 apartments to starwood. Thats roughly a quarter of residential equitys total stock. While some analysts warn zell was signaling a top, others say valuations are just very enti enticing so it was just a good deal. Still kind of red hot but a little bit of easing. Thank you very much. Nike soaring right now. The athletic giant raising its difficult dend, splitting its stock, and announcing a big buy back. Its certainly supporting the dow in todays trade. Consumer discretionary, the best performing sector this year up today 1 alone. But with the fed expected to raise rates next month, what happens to Consumer Discretionary in a rising rate environment. Lets find out with Morgan Brennan taking a look. Hi there, morgan. So weve got more signals this week the fed could raise rates as soon as next month.

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