>> we begin though with a former high flying stock in turmoil. shares of chipotle down again. the cdc says it's investigating another more recent outbreak of a different strain of e he co e. downgrading the stock to neutral. the shares are down 4%. jane wells has the latest. jane? >> hi. quoting a customer on the website saying i don't know how much more of this i can take. yet, they still don't know the cause for even the previous outbreak. the latest outbreak, five new cases of people in north dakota, can, and oklahoma falling ill between november 18th and 26th. they all ate at chipotle. this is a different strain from the original and larger outbreak that began in late october. that sickened nearly 50 people from coast to coast, forced the closings of dozens of stores in oregon and washington which were then thoroughly cleaned. there was a norovirus outbreak in boston this month. this tl was a outbreak in southern california last summer. it's a lot of stuff. and one reason the ceos have changed food safety and handling protocols and last week on "mad money" tried to calm nerves. >> i will say though that we can assure you today that there is no e. coli in chipotle. we have thoroughly tested our food and surfaces. we're confident that it is a safe place to eat. >> he may be right as the latest outbreak happened before he made that statement last week. so are you scared to eat there? we posed that question on cnbc.com. over 13,000 people have so far weighed in. slightly more than say yeah, and they're no longer going. there look at that, 9% said they're scared to eat there but they still eat. there i can tell you the lunch lines, not as long as they used to be. back to you. >> all right. thank you very much, jane. one key issue for chipotle if they ever get control of the crisis is reinstating the integrity of the supply. it is national. it is far flung. it is complex. let's bring in john grey, associate professor of operations at ohio state university -- actual lishgs the ohio state university, fisher college of business who specializes in supply chain managements there anything here, mr. grey that, suggests you to that these repeated outbreaks may be the operations of someone who intends to do chipotle harm? >> of course, i don't know. i doubt it. these supply chain of chipotle is extremely complex, thousands of stores, lots of local suppliers. in order to not have the issues occur, you need 100% compliance of every individual throughout the supply chain even when it's difficult to do so. i would expect these are quality control issues, quality control challenges that hopefully they can get their handle around soon. i would be a little surprised fit was tampering. >> would you eat there? >> i probably still would. you know, the probability of being at the store and getting the contaminated burritto is fairly low. actually, i've always -- they don't have the hand will around it. i always felt like a lot of the things drift with lack of attention. and because the company is spending so much attention on quality right now, as soon as they start to figure out the root cause, it will be safer than other outlets. >> professor, when i read about this situation, there's a lot of comparisons to the tylenol scare. that was actually deliberate sabotage by someone who purposely caused trouble with tylenol and put poison within there. so that's i think one reason why people are so focused on whether or not there is a possibility that is some kind of sabotage. are you suggesting that it would be impossible for someone to do this on purpose? >> absolutely not. no. i think it probably be a difficult way to sabotage the supply chain. it's such a difficult supply chain to maintain given the massive amounts of suppliers and store operations that i think it's more likely a quality control issue. no, it's not impossible. >> is that -- is the complexity of the supply chain the reason, i would think obviously, that they've had such a hard time putting their finger on what the source of the problem s it could be different shorources in different outlets. >> there are a lot of complex supply chains that don't have the problems. but one thing that the ceo is choosing to do is actually centralize the tomato supply chain which doesn't feel good when you want local ingredients and what not. but one main benefits of that is better control from a single operation or maybe not a single operation but many less operations. again, to not have this happen in a food supply chain where you have hundreds of local suppliers, thousands of local suppliers, you need all of them to be complying all the time. and so i think it's a contributing factor. >> to that point, i think a lot of people may not realize supply chain management in a global world is so complicated, there are full on professors when you get an mba, you can get an exclusively supply chain management. when i look at the situation, is it -- am i exaggerating when i say i'm surprised it doesn't happen more often considering how often we see problems with manufacturing, for example, or things that can't get produced because they had trouble source ago poort from different partsst world and country. >> yeah. so first of all, let me point out, fisher college of business is one of the best places to get your mba in supply chain management. you gave me that opening. thank you. to your other question, yes, maintaining 100% compliance and adherence to the procedures required to prevent this from happening are difficult within a single manufacturing facility owned and operated by the company as johnson & johnson found out in ft. washington. there are other examples out there as well. then when you throw-in different cultures, which is china and india and sourcing from those locations, mom and pop shops, everybody is balancing cost, delivery and compliance and sometimes compliance takes a backseat. >> very quickly. do you find it curious that as i do that other chain restaurants seemingly have not had this problem and that it is not necessarily unique to chipotle but is focused there. panera doesn't seem to have it. wendy's doesn't seem to have it. they don't sell the same food but they certainly sell lettuce and tomatoes and ground beef. >> yeah. unfortunately, i don't have any insight into why chipotle and why not other vendors. i will say, again, that i feel like in their marketing materials seems to be focused more on quality than a lot of those other ones that you mentioned. but perhaps the mindset of day to day compliance is not engrained as much as it should be or the complex fresh food local supply chain may be a contributing factor as well. >> all right. excellent point. john gray, associate professor of operations at the ohio state university fisher college of business. >> stocks in a nice rally. the dow and s&p 500 are at session highs. the dow is higher by 132 points. s&p 500 higher by .3. a gain of 14 points. what is leading the way? energy, materials and teches, the days best performing sectors. typical as we've seen lately. the market doesn't seem to be able to move higher unless we see commodities moving higher. so in commodities, let's show wlau is going on. brent is higher by 1%. gold is lower by $7.50 per ounce. >> we're watching twitter and square both stocks are high they are hour. the ceo of those two companies, jack dorsey, holding a live online chat right now. john fort has been following it for us. what is he saying and what kind of questions getting? he's a man on a hot seat. >> a little early to be able to tell what you the questions are and what he is saying. it's just begun. he is doing that chat on product hunt which outside of sill con valley might seem odd. it's a site where an app where people can good in to find out cool new gadgets and apps. you can vote on the best ideas. lately the 2-year-old start-up is voting products, becoming more of a community ashgs place where people can go to share ideas and read live chats, think of it like read it, rappers snoop dog are doing live chats soon. so is stewart butterfield. i would look at this a little light going on stage at a conference. there's a lot of competition for talent still in san francisco. dorsey needs to recruit for two companies. there better be some distance for it. dorsey is so press ford time running two companies as twitter's executive chairman, can you hardly find a slot in his schedule to meet according to "the wall street journal." >> what exactly is he doing on this forum? he is looking at products? is he looking for engineers? is this a place where he could come under fire because he's taking questions? >> theoretically, he co. the format is very much like ask me anything. if yuou're the subject of a liv chat, can you come on. can you go to product hunt and look back at past live chats and also look at who is coming up in the future. and stewart butterfield, snoop dog are among the more popular upcoming chats taking place. people reserving. you can see 1 thou people are looking forward to one chat versus another. >> all right. john, thank you very much. john fort reporting from the floor of the new york stock exchange. >> many are worried about our nation's ability to keep paying out social security. well this could be the best case yet for getting rid of social security. replacing it with investment accounts. we'll discuss. that the dow transports are down 20% this year. what does the road ahead look like for this group? we'll have your 2016 playbook. >> you're watching cnbc, first in business worldwide. the only way to get better is to challenge yourself, and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. welcome back to "power lunch." conagra shares are higher. profits beating estimates. revenue fell short. results were adversely impact bid stronger dollar but they got a boost from lower commodity costs. paychex is lower. they post aid mixed quarter. missing on the top line. and shares of nike are moving higher. athletic giant gearing up to report earnings after the bell. tyler? >> the fate of social security has been an on going debate for generations paflt and certainly yet to come. and "wall street journal" op-ed today, jeremy siegel explains his sorry social security return. and how little return they provide in comparison with other investments. he gave an example. after the $329,640 he invested in social security throughout his career, he will only receive about $840,000 of inflation adjusted benefits over his lifetime. that's about one-third, he says, the $2.27 million he could have accumulated had that money been invested in a plain vanilla stock index fund. so what is the benefit of social security anymore? jarrod burnstein joins us now. michelle will join in this conversation as well. jarrod, i read the story. i know professor siegel. his numbers are pretty compelling. what's wrong with his numbers? >> well, i think his numbers are correct. i don't find them compelling at all. i think what professor siegel discovered is something that everybody knows which is that social security is a very progressive system. middle and lower income people take out more than they put in. higher income people like mr. siegel, they're net contributors. and that's the definition of a progressive system. the reason it's so effective, it is actually offsetting the poverty, abscent social security woeshgs have 40% poverty rates among our elderly population. because of the progressive nature of the program, we only have a 10% poverty rate among our elderly. i think that is still too high. but social security does a great job. >> his point isn't about the progressive nature of it. he doesn't say whether he disagrees or agrees with that or not. the point is if you could use that money and put submit where else, any individual, rich or poor, and invest it instead of having the government handle it for you, you would have even more money. tyler highlighted the stock return. even if you just put it in u.s. treasuries, very, very safe, he would have received more than a million dollars. so a poor person who gets social security could have more money if the system were different. >> yeah. first of all, we have a basic disagreement. i think the point was that for him, from his perspective, it's a program that doesn't pay back what he puts in. and that's because it's a progressive program. in fact, the social security contributions are invested in treasury bonds. and that return is distributed. the reason you don't want social security to be awe function of the stock market, of equities is because of the volatile nature of that side of the market f you happen to retire in a down market, you're going to be much worse off. social security is a vested guaranteed benefit. we don't really have anything like that in our system. >> what about his point regarding medicare sh jarrod? or michelle, why don't you jump in here. where the comparisons or the numbers are even maybe more dramatic? he says if i had put in what i put in to medicare tax which is not subject to that $118,000 cap, i could afford a $30,000 a year health insurance plan very easily. i could afford a cadillac plan. >> i think on medicare, jeremy got a slightly better argument although i don't think that has to do with the mechanics of the medicare program. by the way, did you mention that social security cap is about $119,000. once you pay the payroll taxes, you don't pay any more above. that i vote for making the system more progressive by lifting that tax max. the problem with medicare is that health care prices just keep growing faster than inflation. that's a system wide problem. now we've actually done something to reduce the rate of health care costs. but that's where that comes from. >> if social security so progressive, why do the billionaires that come on cnbc admit they get social security checks? it doesn't sound progressive to me. you defend it as something that is supposed to help the poor and elderly. but it's not helping just the poor elderly. it's helping people who don't neated help at all. >> that's right. you make a good point. while it is a progressive program, it is true that in fact the highest income people get more back in dollars than the lowest income people. and that's because it's a universal program. it was set up that way politically not to be a means tested strictly anti-poverty program. a lot of middle income people depend on it. in fact, if you look at the income of the median elderly person, social security makes up more than half of their income. so this is something that low income and middle income people depend on. absolutely true that wealthy people don't depend on it but they get it because of the universal nature. >> thank you very much. to dominick now for a market flash. >> shares of syngenta are up 3%. the company's chairman spoke to a swiss newspaper and said that syngenta is in talks with multiple parties for that possible takeover that we've been reporting. right now monsanto and a company in china are two companies mentioned by name. they say they have not received a kron kreet takeover offer. they're keeping all the options open. the stock up is 20% this year partly because of the takeover speculation. back to you. >> all right. thank you. transportation stocks big hit this year. the transports down 20% in 2015. is the group set for a rebound next year or more of the same? we'll have your silver lining in 2016 playbook next on "power lunch." surprise!!!!! we heard you got a job as a developer! its official, i work for ge!! what? wow... yeah! okay... guys, i'll be writing a new language for machines so planes, trains, even hospitals can work better. oh! sorry, i was trying to put it away... got it on the cake. so you're going to work on a train? not on a train...on "trains"! you're not gonna develop stuff anymore? no i am... do you know what ge is? now more than ever america's electricity comes from cleaner- burning natural gas. and no one produces more of it than exxonmobil. helping dramatically reduce u.s. emissions. because turning on the lights... isn't as simple as just flipping a switch. energy lives here. the dow is at the high of the day, up 133 points. 17,384. the s&p 500 is higher by more than .5%. nasdaq is higher by .25%. oil is higher. we've seen this relationship consistently over the last several months. when oil moves higher, to so does the stock market. wti is higher by 48%. $36.27 per barrel. the ten year yield is rising. we're seeing selling in treasuries. 2.22% is where the ten year s gold closes in seven minutes. lower by $6.40. we'll bring you up to date when it closes in a few minutes. >> as 2015 draws to a close, we break out 2the 2016 playbook. we look at what is ahead for transports. >> in 2015, transports got derailed by a strengthening dollar plunging commodity prices and slowing economic growth. buckle your seat belts. 2016 could deliver more of the same. first, the railroad rut will continue. weak volumes with will persist until the first half of 2016 as the commodity collapse continues to dampen demand and cheap diesel makes trucks more cost competitive. railroads will have to curb cap ex after a record year of spending and consolidation buzz will persist as the industry seeks new ways to grow. second, networks will get smarter. automation will creep into trucks as electronic device that's log location and driving hours get installed to meet regulations. railroads will keep implementing a mandated automatic braking system and drones will have more uses, not just for testing deliveries, but for inspecting tracks, bridges, and machinery as well. third, package deliveries will get priceyer. both ups and fedex are raising rates as they do every year but it's the u.s. postal service that could create the biggest bills. if regulators approve hefty hikes that, will up costs for amazon and other shippers dramatically. which in turn could curb all the free shipping perks for the consumer. >> i think that last package was mine. it's coming to my house. i know it. take a look at the transports year to date, shall we? there you see them on the day. up 71 points or 1%. over the one year period, down about 17.5% as you see tlit. trading at $74.76. airline index, there you got it. down about a third -- about a .5% at $89.18. >> amazing when oil has been so low all year. >> yes. >> unbelievable. 2015, not a great year for stocks. but a number of names have posted big gains. also big losses. so where are the opportunities? the stocks to sell on the rips and buy on the dips. and one stock that is ripped this year is nike. it's up 35% the best performing stock in the dow. the latest earnings today push the stock even higher? after the break. i'm sharon epperson. here is your cnbc news update. gop presidential candidate marco rubio calls russian president vladimir putin a thug and a gangster. during a new hampshire town hall meeting, he took a swipe at rival donald trump saying he wouldn't like fit putin threw praises his own way. rubio says he would bring cold reality to u.s. foreign policy. heavy overnight rains caused flooding, more flooding in and around columbia, south carolina. several downtown roads were closed. the water receded after the rain subsided in the morning. ups says it expects to deliver some 36 million packages just today. they expect to deliver more than 630 million items from black friday until new year's day. that's a 10% increase from last year. and mcdonald's is trying out macaroni and cheese at some locations in ohio. it costs $1.75 and contains 190 calories. about the same as a four piece chicken mcnuggets meal. according to the fast food giant, it is made with real cheese. that's the cnbc news update at this hour. you would eat it? >> oh, yeah. absolutely. i love mac and cheese. >> the final trades on gold are crossing right now. let's get to jackie at the nymex. >> it looks like gold is going to finish the session just under that $10.75 level, giving back the gains we saw yesterday. about a $6 loss. interesting that gold is down on a day when the dollar is douvenlt it shows through is not a lot of conviction in this trade. people are going to be squaring books as they head into the holiday weekend. that is part of this and also as we head into the new year. copper is low better 1.5% on a day where we are seeing strength in he can widz. so showing a little bit of a disconnect right now that commodities are operating pretty much on their own for the time being. misch snell. >> thank you. >> i'll pick it up. thank you. back in august we held a tournament style contest to pick the beaten down stock to buy. buy the dip and which s&p 500 stock that was near to a high to sell. sell the rip. you voted on twitter. how did do you? dominick chu knows. >> let's take a look at the buy the dip. >> rippers and dippers. the dow stocks, again, these eight dow stocks, apple, intel, caterpillar and exxon. >> those are dippers. >> ibm, amex, p & g and walmart. when we asked this question to our viewers, those were stocks in the dow that were all in correction territory. >> all of these? >> all of those guys back then were already down 10% or more from their recent highs. so the question we asked was which one of them represented the best opportunity to buy going into the end of the year? people overwhelmingly, i say a wide margin, picked apple as the dow stock they would most like to buy on this particular dip. and so let's show you how things did. apple actually since that time has lost 7% of its value. >> the people were wrong. >> the people were wrong on this one here. they weren't -- they weren't terribly wrong but they didn't get the best trade possible. if you're looking for what actually did do the best in that group, it was actually old world technology. intel shares. intel shares up 20% just since august sixth. it's had a very nice run. the worst stock among those eight that we profiled, walmart. losing -- it was down 13% going into that number. and that's down about 18% since then. so walmart shares have slid even more. so on the buy the dip side, apple didn't necessarily work. it is down 7%. intel and proctor & gamble were the only two positives. >> so the people voted for apple. it was down 7ers in a kind of iffy market. where -- do you happen to know where intel fell in the popular vote? >> was it at the bottom or top? >> intel didn't ghaet far. i have to go back and look. they put the chart away. >> put a new one on. >> again, we'll go back. you should go to cnbc.com and check out what happened in terms of the brackets during that time. but intel didn't advance as far as some of the other dow stocks did. >> so these are the rippers. >> now these are the ones that had been doing well into august. >> these stores were one that's were at or near record highs. back on august 20th. >> not all dow stocks. >> facebook. we expanded the universe. facebook, jp morgan, nuke nike and starbucks. on this side, chipotle and under armour. you can see the brackets. chipotle went against nike and it is the one that our crowd sourcing told us is the best twoun take profits in and sell at that time and they were right. so out of those -- >> they were right and maybe they were -- i don'ten into to say lucky tlachlt is not what happened to chipotle. >> it's hard it for people to mod until or get the probability of food born illness. they lost a third of their value. there take a look at outside of those stocks which ones did best and worst. check this one out. it was under armour and facebook. facebook up is 10% since that. didn't want to sell it. there didn't want to short it. under armour has taken quite a bit of a dichlt i mention this because we know we have nike coming up after the bell. >> that's interesting. thank you very much. >> you got it. >> stocks are sitting near their session highs after moving between gains and losses this morning. the dow, triple digits moves in the past seven sessions is this rally good news for 2016? joining us are phil orlando, chief he can quit strategist at federated investors and jack ablin from bemo private bank. let me begin by asking you, jack, what do you expect for 2016? >> a little bit more of the same, tyler. now that fed is starting to tighten. i think that the credit markets are beginning to tighten up as lenders are becoming less willing to extend credit. quite as aggressively. then we're certainly feeling the effects in the high yield bond market. i think in some of these buyout and buy back candidates, i think the money available for those programs won't be as generous in 2016 as they were in -- >> so i'm sort of hearing you say, if you can put words in your mouth which is what i'm trained to do is that you would expect a 2016 with returns that are -- jack lost his ifb. >> i got you back. >> you got me back. i'm interpreting what you're saying is you would expect returns in 2016 to be roughly from 5% positive to 5% negative. >> yeah. i would say 5% positive. maybe 10% negative. i think there is still a negative skew. there are a couple things that could make 2016 more difficult. profit margins, we're starting to see them roll over a little bit. and that's creating, you know, tension on valuations. the fact is as we have seen, revenue growth has been down now for three consecutive -- four consecutive quarters. profit is down for three consecutive quarters. if the fourth quarter comes in as analysts are anticipating. i think there is pressure there. on the flip side, the economic backdrop sim proving and perhaps fundamentals will catch up or meet in the middle. >> i see so many reasons why to worry about next year. we'll spend next year just like we did this year sshgts fed going to raise rates at the next meeting? and look what happened this year. the market essentially flat. and then look at the transports. that looks like such an awful, awful signal about the economy. down 20%. why is that? we're talking about supposedly, you know, the economy that is not great but clubbinging along. >> well, if you look at the airline sector, you fly a lot as i do. planes are completely full. fuel jet which is roughly half the cost of what an airline does is significantly lower. crude prices are down by two-thirds over the last couple years. so that's a sector that ought to work if the economy continues to do well. and frankly, we've got a sort of an added consensus view that we things will chug along here and we're going to be in better shape by the end of next year than the consensus believes right now. >> so playbook for next year, you're saying buy the airlines, buy the transports at this point? >> certainly we would buy the airlines right here. we also believe that we saw the gdp update today. we think there is a quarter of that left. we think the manufacturing sector of the economy might have to get back into an inventory restocking situation. that's not a consensus view f that's right, if we start to see an improvement in inventories in the second half of next year thashgsz going to boost the other parts of transportation which is truckers and rips. >> thanks very much wlchlt i grow up, i want to be like you and live where you do. appreciate you being here. >> with no tie. >> exactly. go to our website to see why jack is seeing an improvement in the housing market. numbers today weren't that way. he'll explain. that's on our website. >> yes. speaking of the housing numbers, they moved around the bond market a lot. let's get an update what is happening now. rick santelli is tracking the action at the cme. rick? >> yeah, they did move. the wrong way. weak data is supposed to bring yields down. this re-adjustment phase is still going on. volatility is tempered. maybe we'll see a more volatile picture when we get everybody sitting in the big chair again. we're challenging the hoigh yields yesterday. up several basis points year to date chart is fascinating. they match up pretty well. that's because at 2.22, we're up 5 basis points for the year. virtually unchanged. by the way, year to date total returns, price appreciation in interest stream, 1.7%. so not bad when you look at where equities are hanging out outside of the nasdaq. switch gears to the dollar index f we look at the dollar index from december 1st, not a very aggressive picture. many miscalculated how it would behave post fed. if luke a year to date, it's up nearly 8.5%. so it had a good run. it just priced in a little bit early. michelle, back to you. >> good point there, rick. thank you. another red alert day in beijing. china sales are a big deal for nike. the stock is the best performer in the dow this year. up 35%. the index is down. can it keep the run going? earnings out after the bell. we'll have a preview next on "power lunch." conquer the weather. don't let it conquer you. with the capability and adaptability of lexus all-weather drive. this is the pursuit of perfection. ashley bryant, you are a teacher of small children. that's right. i have read it is the hardest job in the world. that's why i'm here. can you... i can offer advice from the accumulated knowledge of other educators... that's wonderful but... i can tailor a curriculum for each student by cross-referencing aptitude, development, geography... sorry to interrupt. but i just have one question: how do i keep them quiet? (pause) watson? there is no known solution. welcome back to "power lunch." shares of caterpillar are rallying up 5% in trading at the best levels of the day. now this despite being hit with a $74 million penalty and a trade secret suit, the trade is providing the big boost today. for the year, it's one of the biggest laggers in the dow jones industrial average down by 25%. back to you. >> thank you very much. the best performing dow stock for the entire year is nike. up 35%. it reports eagerly awaited results, two hours from now. and joining us now with more on nike, melissa lee, michelle is here as well. you follow this company. what are we looking for here? can they keep up the winning streak? >> here's what you want to watch, tyler, to answer that question. china, last quarter nike saw sales jump 30%. the ceo told me in economic that he doesn't see any sign of a economic slowdown in china. nike gets most of the business outside the united states. the strong dollar does cut into profit and sales. last quarter sales would have grown 14%. but the dollar cut into that. they only grew 5%. and margins, this has been a great story for nike, it's been an innovation boom and with products, new products that are allowing nike to raise prices. can they keep that up? that margin improvement? it's a factor to watch as nike warned it spla to clear extra inventory in the past quarter. spintding big. recently signing lebron james for life and, of course that, new nba contract. we'll see if any of it can hurt those rising margins. the futures orders are also key. that's where the stock usually moves off of. they break it down by geography, a indication of future business, north america, europe and china have been very strong lately. >> so melissa parker, as sarah said, is not worried particularly about china. shouldn't be? >> no. the short answer is, no. china, the economy, basically there are two different roads can you take. can you see that veal side of china and manufacturing side of china is slowing down. you see that through copper prices and cat pill area. on the consumer side that, is a side of china that is growing. you see that through nike and apple. chinese consumers will in fact pay up for what they want. and so we really see this as continued strength in nike for china. as sarah mentioned, the currency could be a key aspect here in term of being a head wind. their currency has weakened considerably. while we're going to see growth, it is a currency head wind that is not insignificant there. >> so nike is in short a kind of proxy for part of china. >> for the consumer. absolutely. >> huge thing next year is the olympics. >> sure. >> nike will be all over it. this points out, again what sarah said, nike is fundamentally not a u.s. company. >> 45% -- >> but 45% of revenue still comes from north america. the rest of the world is 55%. currently china is 10%. when you look at their plans, they want to be a $50 billion a year company by 2020. they're $30 billion now. that means they have to have massive growth in china. that's why kline is so crucial. that's why sarah highlights. you have to watch china. they have to go from 10% of revenue to something much larger. they expect high teens, high teens growth for that area of the world whereas western europe and north america, single digits. >> right in and out size of china, it is the largest athletic ware market, period. so on top of that, just the size we're also expecting very high growth. then you overlay that with the growth of women in china, you saw that article in the journal today about the crazy gym devils or the gym rats in china. women are feeling all the growth here in the chinese market. only 40% of the market right now in china. it is the highest growth portion of that market. >> sayer yashgs back to you. nike is an amazing machine, i think. i follow them way back since they began in 1972, i believe, with the running shoes and phil knight, he was the track coach. but at any rate, they got the best advertisements. i love the snow day ad. they're brilliant. the agency is fantastic. but they have competition. how worried is nike about under armour, about others in the space or is that a fly on the elephant's hide? >> i would -- i ask nike about this every single time. every time you ask them about competition, they don't mention them by name. they look it as -- >> and neither does kevin plank mention nike by name. >> kevin plank understand that's under armour is an underdog and he is growing faster. nike says is because they are the market leader and the dominant player in the industry, they expand the industry with new offerings and new o innovations. they don't look at the other guys. they have more than 90% market share in basketball shoes n one sense, they own the market. but they don't have a monopoly whether it come to sport appa l apparel. and that's a big opportunity for the competitors in women's like lulu lemon and gap and for nike to catch up when it comes to that. nike only has about a $6 billion women's business. there is room for growth there and competition. >> thank you very much. ladies, thank you. >> let's get to brian sullivan, see what is coming up on the second hour of "power lunch." >> you were talking about nike and china. before we get to the menu for next hour, want to show wlau is going on in china right now. look at that. if you can see through it. beijing still under red alert because of dense smog. get this, levels of certain particles in the beijing air are 20 times the level that is considered safe by the world health organization. the red alert expected to be lifted tomorrow. hard to go jogging in your new nikes if you can't breathe. all right. let's move on. we're going to dig more into that huge miss on the housing numbers. the question is, was it just a one month inventory wonder or a sign of tough times to come? plus, what are the best places to invest next year? your market guest has ideas. we're going to bring them to you. and history says that when a ceo does this one thing, it may be a great time to sell the stock of that company. the ceo of the company you know just did that thing, what that thing is and who the company is all coming up in the next hour. we'll be back after this. er group, they work all the time. sup jj? working hard? working 24/7 on mobile trader, rated #1 trading app in the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of the other competitors do in desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivative pricing model, honey? for all the confidence you need. td ameritrade. you got this. we heard you got a job as a developer!!!!! its official, i work for ge!! what? wow... yeah! okay... guys, i'll be writing a new language for machines so planes, trains, even hospitals can work better. oh! sorry, i was trying to put it away... got it on the cake. so you're going to work on a train? not on a train...on "trains"! you're not gonna develop stuff anymore? no i am... do you know what ge is? net app announced they're buying solid fire in an $870 million deal. trying to boost the flash base storage offerings. that put the stock under pressure. analysts feel, at least some of them, that it lessens the likelihood that they may have bought itself. netapp engages in the business of computer storage and systems. back to you. >> all right. take a look at this hour's power point stocks. the dow up triple digits. energy, tech and consumer discretionary. caterpillar leads. one oak leads the s&p 500, whole foods leads the nasdaq 100. and as if the nfl hasn't had enough bad press this year, now a new movie critical of the handling of concussions is out friday. christmas day. a star player gets to spend it for a violent helmet to helmet hit on sunday. we'll discuss all of that with former giants wide receiver amonte tomber nefl on "power lunch." ♪ i built my business with passion. but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy for my studio. ♪ and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... that's huge for my bottom line. what's in your wallet? >> two harlem globetrotters ringing the opening bell. good lessons for kids. if at first you don't succeed, try, try again. two hot topics now surrounding the national football league on christmas day, a controversial new movie called "concussion" starring will smith hits theaters nationwide. it explains the issue of brain injuries in the sport. first, we have to talk about the actions of giants wide sereceiv o'dell beckham jr. this resulted in getting a one game suspension from the nfl which he has since appealed. with us now is amonlty toomer, a great wide receiver and the co-host of "going deep with amonte and dan." abacker with the bears is with us. i have to begin with o'dell beckham and the shot that has been giving him fits all day long. did the league handle it right? should he have gotten a stiffer penalty? >> i don't think he should have got a suspension. if there was a suspension handed down, they should have got both josh norman and o'dell beckham jr. >> you think they were equally culpable? >> if you're a player, you have to make sure that you don't see those types of things on film when another team watches you play. they don't want to see you -- if they see you getting thrown on the ground, they're going to start to throw you on the ground. >> did the referees lose control of this game? >> absolutely. the first time that josh norman threw him on the ground, there should have been some sort of flag, warning, something until they -- but they let it get out of hand. once it got out of hand, it was unstoppable. you see these things in the nfl. this isn't the nfl i remember playing in. >> threes are two of great young stars of the league. >> dr. j., what do you think? >> i agree with him. he played the position. so i think you can't ever let somebody get under your skin as much as o'dell d on the other hand, you certainly can't get punked, in other words, he can't go to the sidelines or back to the huddle and have everybody look at him going, are you going to take that? so he had to do something. it is sad though. i agree with him. i would put the blame squarely on the officials for not cutting it off sooner. if they had, it wouldn't have gone this far. >> you are going to see "concussion"? >> i've seen it. >> what do you think? >> i think it was entertaining movie. i think will smith played it well. i think it's about three years too late with the content. i think the information is already out there about concussions. but it was a very entertaining movie. times it was a little slow. but the information out there and the plight of the doctor was pretty good. >> i know so many parents who say my kid is not playing football anymore. they're talking about not playing soccer anymore because they're so concerned about head injuries over a lifetime. does the energy energy, does football face any kind of threat? >> you took the word out of my mouth. i think it does. i think what we need to know about this is ct sechlt not synonymous with just football. like you said, soccer, there's, you know, there's concussions in hockey. >> women's sports. >> boxing. >> very high rate. and i think that, you know, it's in life there are risks. when you're young, in your 20s, you want to take risks. >> john? your father is an esteemed physician. what did he counsel you about football injuries and specifically head injuries? what would he say? >> well, back then, tyler, of course the information wasn't as widespread as it is now. now they have the protocols that he spoke to. that's what they needed. that's what they have now. you see guys pulling them out of games and doing assessments on the sidelines. it wae it wasn't football or soccer or hockey said we don't care about this. they do care about it. there wasn't the protocols now in place. >> one more very quick question for you. does the nfl have an on field behavior problem with guys dancing and celebrating, tackles for two yard losses? i get fit you have done the interception like the guy did on the goal line in the super bowl. all of the wolfing and so forth. should they clamp down on that? >> you play on emotion. i mean to go on that arena, you know, getting ready to take on some of the physical challenge that's you take -- >> pump yourself up. >> you have to be in a different mindset. we're here. heart rates are lower. it's a very calm situation. >> good thing zroipt a pulse. >> i'm just saying, it's a little different when people are are running at you and you're trying to physically, you know, handle people. you have to be in a different mindset. >> right. >> i think that what you're seeing is only the game. you're seeing -- you're not seeing the hours that it's taken these players to make those types of plays and the hard work they put in. so it's not just what you see, it's hours and hours of time put in during the week that helps these players, you know, make these types of plays that i think you got to really understand. >> all right. thank you very much. as always, thank you. and that, folks, michelle, great to be with you. that will do it for the first hour. brian, over to you. >> thank you very much. 2:00 here on the east coast. 1:00 in new orleans. dow higher. oil does something very strange. what that is in a few minutes. melissa is here in house. we're happy to have her. we begin with housing. look at that number. the november home sales figure tanked 10.5%. that, my friends, the single biggest one month drop for existing home sales number in five years. is there something not necessarily bad going on here? chief economist it from red finn joining us now. everybody that's negative on housing is pointing to this number and saying, see! this is where it begins. but when i look at inventory figures and how low they are, i'm thinking if there's not homes to sell, the numbers going to go down. what's the real story? >> you can't sell what you don't have on the shelves there, brian. i think that's what we're seeing. inventory has been down year over year for ten consecutive months. buyers are out there. they're looking. they're touring. they're trying to make offers. but there's just nothing to buy. >> at the same time, a lot of people are pointing to new rules for mortgage forms which would seem to case this decline in november was a one off. what is your feeling over at red fin? is there confusion over the form? >> there's no confusion on our end. there could be confusion in the industry. it's really case by case, lender by lender. lenders have more control over the settlement process than they ever had before. for some lenders, 45 is the new 30. they're padding into extra weeks to closing time. for other lenders, they can sail through. it really is case specific. but had this inventory situation and also steepening price clz we also saw in november, those are what are affecting buyers right now. >> not new regulations. >> i have a lot of friends and family members that are in the residential real estate industry. they say, brian, stop talking about credit. it's out there. start focusing on appraisals. it's still a major problem. it's driving my real estate friends insane. what's going on there? point to appraisal reform, not closure statements. that's what's holding up closings when appraisals are coming in below the transaction and the offer prices agreed to about it buyers and sellers. look, reform what is needed. but in fixing one problem, the fear is that it caused another problem. you get appraisers outside of the neighborhood that don't know the homes and appraisals the yesteryear. they're independent and less knowledgeable. that is really causing delays in the system. >> how is the health, as you see it, of the u.s. consumer? >> i think the consumer is good. i think they have a number of headwinds to overcome that are frankly unfair. one of the headwinds is that they're ready to bichlt they may have the down payment. they jump through all the credit hurdles and yet we still have inventory that is down 5% from a year ago. new construction is still lagging. even though we have buyers out there, there's nothing for sale in the price point that they needed to be. that's the big problem for the housing market for next year. >> always a pleasure. thank you. >> thank you. good to be here. thanks. >> final read on third quarter gdp, 2%. that is basically in line with estimates. let's goat steve liesman with a breakdown of growth this year wlachlt is weak and wrong and what it means for 2016. steve? >> thanks. we're doing experimental here. trying to show you a different way of looking at gross domestic product and the second hour of "power lunch" is totally experimental. if nothing else, you goat look at a pretty chart here. what we're going to do is show you the growth rate and how much they contribute to total growth. so take a look over here. the green is net exports. that's the trade deficit. you see it on the negative side. subtracting for growth. the big picture as luke across is the blue line. that is the consumer. what you see here, we were just talking about it, is general strength of the consumer. the red here is business investment. that includes a whole bunch of things. equipment spending, inventories and we folded in residential building which is pretty strong. what can you see is it's up and down and up and down. but the green thing here is the things that been taking away from growth the most and that is essentially the result of weak overseas growth and the stronger dollar. been taking away. the purple line here, take a look. that is the government. that's been kind of a modest addition to growth. put it all together and do the math. you see what happens here. move along, that weak first quarter. we'll get fourth quarter n year. you can see right that 2% with a strong consumer, but weak investment spending. begin, additional drag from trade. let's talk about the factors for next year. the consumer, positive factors include decent job growth, low oil prices and modest wage growth. can you still do that two or three. a drag from modestly higher interest rates from the fed. business investment, a little more challenge. see if we get an end to that inven tore yoi drtory draw down. a stronger dollar is saying if oil can find a bottom and the dollar can find a top, we may be able to move along. they did a budget deal. you may not like it. but it means more government spending for next year. that will add to 2016 growth. so melissa, it's a question of can you put all the factors together to break out of the 2% doldrums we've had and finally, finally, finally get to something like 3% growth. >> yeah. and where wall street analystors economists on 3% at this point? >> we're trying to -- >> we're trying to get through the fourth quarter and get 2% growth. i think there is a chance of 2.5% if we can get rid of the drags, if oil finds that bottom and the dollar finds the high. >> throws are two big ifs. steve, thank you. let's get to dom chu. >> recap things, we're near the best levels so far today. the dow up by nearly 160 points at this point. the s&p 500 up by 15 points. the nasdaq trailing down -- or up rather by only 21 points. that's .5%. as markets turn in a n. that solid gains, traders are snapping up shares of beaten up stocks so far this year. you can put whole foods in that cat gorey. the stock up about 5% today, near the best levels of the session. making it the best performing stock in the large cap nasdaq 100. remember this is a big lagger. the stock even with today's gains is still down 31% so far this year. back to you. >> all right. thank you very much. >> now let's get to the oil story. something is happening with u.s. and global crude prices which is very unusual. we're going to get to that in a second. let's welcome in roberto freelander. roberto, a lot of people are coming on this fine show lately saying they think oil prices have bottomed. mostly it's opinion. built you wrote this morning that there is something going on between the current and the six month out oil futures contract in price which may actually help prove oil may be making a bottom. what is it? >> for sure. i think first put in context. we had the front month expire yesterday. of course, holiday week. volumes are 20%, 30% lighter. if you look at the six month out contract is doing, it's extraordinary high premium. so they're willing to bet on high oil but their selling because of uncertainty and uneasiness where the markets are at this point. so luke back historically, we've seen this 20, 25 times in the last 20 or so years. last year was earlier in this year, january and february of 2015, prior to that, we saw it in april of '09. but in each case you saw wti about 20, 25% higher, three to six months out. that would get us from here to 45 wti which i think is a comfortable level. most folks are modelling it for it in 2016. >> it's getting the headlines and i talk about being unusual is that brent crude which is the global price and wti which is our price are basically parody. they're a couple seconds off. brent was below wti earlier today. usually a spread of $5 or even more historically. what do you make of what shapg right now? what does it tell you? >> we're going back to historic am norms. if you look back 15, plus years ago, brent traded at a discount to wti. so that's a lifting of the export ban. a lot of guys factors this in. that wti and brent was going to collapse. that's one of the reasons our folks in congress gave the refiners a 75% tax credit to try to mitigate some of the damage when the export ban was lifted. that is pressing the margins. it's related to the kport ban being lifted. this is historical norms. >> so how do you -- does the sector, refining sector deserve a rerating at this point? it's hard to factor in as a fundamental reason to buy them, a tax credit as opposed to a spread that you says is normalizing back to historical levels. >> yes. so i still think can you go with the better refiner name. it's harder to model in and again with nat gas at these levels, that is also a concern. but there is still a margin to be made for the refiners. it certainly not what was a year or two ago. it's going to be coming with the export ban being lifted. there is a margin to be made. >> all right. roberto of green capital watching that gap between the july and current contract. thank you very much. >> have a good day. >> here's what is ahead as we roll on. your market guests giving you his best investing ideas for next year. the cool video from the rather incredible rocket landing space x just pulled off. we said landing. and the one thing that a well known ceo just did that may make you want to sell his stock. plus, a great mystery clart for you today. can you name it? it's up 15% this year. not much of a hint. not a lot of stocks are up that much. there is the chart. send in your guesses. we'll be back with that and more clues. stick around. wallapop makes it simple to sell anything! just download the free app; snap a picture of your item and it's instantly listed locally, free! wallapop users have profiles so you'll always know just who you are dealing with. start selling with wallapop. stocks hitting session highs. the dow is up by 158 points right now. we're pulling back the curtain on a little known trading phenomenon, if you will. that could help you outforeman the market this year with markets up. this is interesting. i never heard it before. it thooz do with sectors and tracking how they perform this year in terms of determining what sectors to invest in next year. >> it may be counterintuitive. you're not looking for the best sector this year and betting on it to repeat next year and you're not looking for the really beaten up stuff. the second best performing sector in the market for this year has a strong tendency to outperform the market in the coming year. it's called the bridesmaid strategy. this is something that people have been track forg years now. the basic numbers in terms of performance, over the past 25 years, wheat the market by 5% a year. if you just bought that one sector. essentially, it's not taking the best one for next year but the one that has a good shot of outperformi outperforming. it worked more than two-thirds of the time. this dwreyear the bet is health care. it is beating the market this year by 4% or 5%. it seems like it's intact right now. now interestingly as we goat year end, it's the race for number two right now. the best performing sector looks like xirt in that number one spot. here are the three that could be second, health care, tech, and consumer staples. i would note that they use a total return, including dividends measure for that number two. it could be a little different than those percentages we just showed you. >> health care might have a slight advantage. they have a higher dividend payers. >> it could get in there as well. i looked at years when it didn't work. what you haven't had, you haven't had a good up year for the overall market. this one left you in a bad place. in other words, usually participate or beats the nashgt a good up year. in bear market years, you have been badly placed at times. >> does it matter the trajectory of the chart going into year snend look at health care, for instance, health care had been a great performer until about august. falling apart now. a lot of people worried about the political climate in 2016 with the elections coming up. >> it's not nuances enough to okay into account how we got to number two. really, it's a pretty much this is my pick. i'm going to stick with it type of strategy. i don't think many people really follow this. they point it out every single year. it's not as if i think there say lot of money that tracked it. you look at the old dogs of the dow, it seems like that got a little overplayed and doesn't work as well. >> all right. we'll have to watch the bridesmaids. thank you. brian, over to you. >> well, let's welcome in wells fargo's john manly. thank you very much for joining us. when you look out next year, i mean let's be honest, 2015 is so last year already. where do you see the best places for our viewer listener's hard earned money to invest? >> i think technology sector still could be pretty good. i'm focusing on business to business. i think businesses are going to be seeing upward pressure for wages. they'll try to offset it with technology. i still buy health care. part of that is me. it is a great growth story longer term. i see in health care myself. i'm 3% plastic and thoep die 7% plastic. there is more they can do for mechlt i also mention energy is as my value plan. >> okay. those are big sectors, john. focus on the last one first. energy. that says a lot. coal could be drillers, can you drill down a little more specifically for us? >> i can drill down and tell you i'm focusing on intergrated. i'm a chicken. i want to play it softly. i think what happens here is if you look at the big integrated over a long period of time, they're not nearly as crude sensitive as they behaved in the last six or seven months. down stream operations off set a lot of the problems. you have cash flow that maintains the dividends. i think that's a big story. with drilling down and some selling in the oil market right now, if you have a year or, two you need for a value play to work. there is not a bad place to be. there are high quality stocks. focus on the seven sisters. >> you're talking about the biggest of the big boys. >> the real big ones. >> we can figure out the names. then when you say b-to-b in technology, i assume you're referring to sort of crm-based software companies? >> i'm talking about companies that help other companies become more productive. business to business, obviously. what that means is i think that people who run corporations to day fundamentally different than the people that ran them 50 years ago. they're very good at watching the bottom line. while they may feel upward pressure, they're going to try to resist it. they're not going to give away the farm. >> i would say that 700 e-mails a day could make us less productive. that is a different segment, john. health care. payers? hospitals? i think the general pharmaceutical area is still pretty g biotech which has come under a lot of pressure. my experience has been when high growth, high multiple sectors get hit because of valuation, primarily valuation, i think that's what this is at the endst day. they usually don't stay down. and that's because sort of on a rising escalator. rising escalator tends to lift things up. there will be a lot of talk going into the election. how much is going to come out of it? that say much more problematic question. >> john man lishgs wells fargo, john, happy new year. we'll see new 2016. >> brian, coming up next, the sing the best etf to own into the new year. we weigh in. and a picture perfect landing kicking off the new chapter in the space race. we got the details when "power lunch" returns. we have video, hopefully it will roll. there we go. there is space ex in florida. a rocket launching is not a big deal. a rocket going up dropping satellites into orbit and then landing successfully without exploding that, is a big deal. they went crazy there. amazing. fantastic stuff. >> a huge step in the race for space there. but, of course, his victory couldn't go too long. jeff bezos sent out a tweet, welcome to the club. >> you say it's a giant leap. no. here's what is a little disingenuous about the tweet. his blue origin, they landed a rocket a couple weeks ago. but jeff knows his rocket only went sub-orbital, this went into orbit, dropped off a payload and came back down. it's kind of like if i jump and dunk versus just jumping into the air. >> i see. >> you have to also dunk. >> that's total space geekiness that i can't participate in. but i take your word for it. >> that's all i got. all right. time now for trading nation. investors are not too excited about american stocks this year. among all the flows and etfs they scan 24%. that's up about a quarter. went into american centered investm next ts, half flowed into international equities. the other money vanished. so where should you put your money next year? let us ask our "trading nation" team. boris, of all the etfs you can choose from domestic and international, there are thousands, which one or ones would you pick? >> well, i'm a macro guy. one of the big themes for 2016 is i think the germans are really going to outperform. they have a lot of tail wind behind them with the lower euro and a lot of credit coming out of ecb. so i like this etf called dxge. it actually hedges the euro out of the equation. i don't really love the hedging of currency. i'm not bullish on the euro. i think it's a good trade. if you really, really want to get fancy with it, i would actually do a paris trade. i would go long vxge and sell the buy mon the diamonds against it. >> you are noted. ri rich ross, is there any way charred what he talked about? >> i would expect to see heightened macro volume silt like we have in 2015. in that environment, growth and inrow sahratian will continue to shine. here's a great way to play it. look at the ibb. this is your benchmark biotech etf. it still up 9% year to date. in fact, brian, it's outperformed the broader market in the december decline. when you look at the chart, you sthee asending triangle coming off the bottom. you're into resistance at the 1 hundred-day moving average. it tends to be a continuation pattern here. we expect the ibb to move higher. when we look longer term, we really like this chart here. that 100 week moving average held for the last six years. with the 30% pullback to that key support which has been tested and held. we think the uptrend can resume and we think biostek a great place to be in 2016. >> okay. a great place to be. leave it on an optimistic note. rich ross and boris slosburg, thank you. more "trading nation," head to our website. >> let's take another look at today's mystery chart. the first clue, the stock is up 15% this year. your second clue, think teflon. more hints and the answer are coming your way. first, the oil market is about to close for the day. we're headed live to the nymex when "power lunch" return. checking out the listing on zillow i sent you? yeah, i like it. this place has a great backyard. i can't believe we're finally doing this. all of this... stacey, benjamin... this is daniel. you're not just looking for a house. you're looking for a place for your life to happen. zillow. i'm sharon epperson. here is your cnbc news update. sergeant bowe bergdahl facing a military judge for the first time since they decided to go forward with a military trial. gop presidential candidate ted cruz says he and donald trump could well be the final candidates dueling for the republican nomination. he made the remark at a campaign event in east tennessee this morning. tennessee is one of several southern states holding a primary on march 1st. workers at an amazon warehouse in germany holding a rally during the second day of their strike. a union representative says workers at six of the nine amazon warehouses were joining in. germany is amazon's second biggest market after the u.s. and members of the world famous harlem globetrotters rang the opening bell at the new york stock exchange this morning. the team is celebrating its 90th year in existence. the world tour begins december 26th in my hometown of pittsburgh, pennsylvania. and that is the cnbc news update at this hour. >> wait a minute, you're a yinser? >> absolutely. i am. >> for christmas i want a six-pack of ic light. >> coming up. >> all right. thank you very much. >> this bizarre day for oil is about to close. jackie d at the nymex. global crude dancing on the pricing floor. what a day. >> what a day for oil prices. i think we have a historic close here. wti was positive on the session. finishing at $36.14. once i get the final numbers i'll know if brent settles under that level. i believe it did. if it did, that's the first time we've seen that since august of 2010. as you know, people are pricing in the fact that we may see the export ban lifting. wti competes on the global marketplace. that brings the premium for brent crude down. interesting, wti bounced today, explained by most traders as some of the window dressing as we're going into the holidays, maybe a little short covering. people squaring away positions. not to necessarily make too much of this bounce. early we are the guest you talked about the potential for bottoming here. certainly possible. many traders i speak to still think there is down side ahead for the wti contract. so something to watch. brian? >> all right. thank you very much. we'll see you soon. >> time now for "street talk." the analyst recommendations on the stocks you need to know b the first stock is duke energy. raising the target to $76 from $71. interesting, only they cut the target back in november from 74 to 71. that followed duke's manageme in. ts own guidance. part of the reason is the possible sale of the brazilian assets. 10% upside. not a lot. but they also pay nearly 5% dividend yield. >> this is a sector that is performing well while holding up. despite what you might think in terms of rising rates and impact on utilities, it hasn't had an infect so far broadly on the sector. >> whiting petroleum is being knocked down. it seems like a big cut. that is still 56% up side from yesterday's close. downgrade comes as the commodities published a report entitled lower for long enough. bmo says the asset is being at the margin in terms of break even and economics and lower for longer oil price forecast makes the resumption of growth difficult for a player like whiting. >> we talk a lot about bonds and whiting's bonds are down fairly considerably. the bond market is not liking whiting. next up, speaking of not liking something, etsy. they say sell, sell, sell. they start coverage with a sell rating. they have a $5.75 target on etsy. the analyst there says that amazon may be etsy at what etsy used to do best and that is seller service growth. any chinese goods make it thoord know what is handmade sort of etsy's thing. they found many similar items. >> if you are known for having handcrafted products and those products might be made in a factory in china, that really goes to the core brand, right? or whose machine. but it's interesting. analysts starts coverage. starts coverage at a sell rating. >> the shorts. >> microsoft here watching pacific crest is lowering estimates for the second half of fiscal year 2016 for microsoft which has been of course a solid winner this year, up 18%. the analyst says he is more constructive on pcs and windows 10 growth. but he is trimming estimates to account for a more likely view and how to win gross margin pressure still they got an overweight of the stock. they are buyers sees up side to $65. >> who doesn't love microsoft right now? everybody seems to be -- >> finally hearth balini. she didn't love it for a long time. >> i set the sur sfas an awesome defis. the microsoft sfoen fantastic. i'll tell what you, did you ever see them out? >> you are serious? >> do you see them out? do you ever see anyone using a microsoft phone? >> i don't think anybody love that's. >> everyone loves microsoft. i don't see the new products. whatever. all right. last bust not least, under the radar name. this is really above the radar name since it is an airplane parts maker. florida based, buddy. they make parts for airplane manufacturers. this is a very interesting business. it takes years to approve a screw or nut that goes on a plane. upgrading it to a bichlt the target goes to 60 from $55. >> general health and also the barrier working well for heico. your under the radar name. and that wraps up "street talk." many fear how the fed's decision to raise interest rates in a decade may impact the bond investments, fed tightening may not be bad for bond investors. >> john miller, co-head of global fixed income. this goes against what everybody thinks. interest rate hikes eat bonds. why are you saying they won't? >> a couple different things. first of all weeshgs talking about the normalization or the process of normalization of the very short end of the yield curve. that is actually constructive for the dollar and keeps in play some forces preventing an outgrowth of inflation longer term. so the municipal yield curve is very steep. and this has been well anticipated, in fact, future rate increases are also anticipated. but municipals also have trading and performance value that's are really contingent upon things like supply and demand, trends and credit quality, the value of the tax exemption, the value of certain coupon structures. and fed funds is one factor that seems to be a little bit on down the list. it's inflation that would erode the value of the bonds. >> whethn it comes to decide wl they should make a good investm next t. do you take a look out to the projected performance of the s&p 500 and find that maybe if investors have more of an appetite for risk, they'll have less of an appetite for a muni bond. >> that could be. really, investors allocations to municipal bonds, the percentage ownership of the marketplace has actually been declining ever so slightly since the second half of 2013 where there were major outflows due to the taper tantrum. plus, post 2013, there's been a very substantial amount of individuals investors bonds being called. about $200 billion in bond calls per year. another $200 billion in them shrinking. and i think for people getting into the new top tax brackets, 39.6 plus a lot of states have taxes around 8% to 10% plus munis are exempt from the medicare tax, those allocations are down slightly. they're not down heavily. but the muni bond allocations are down slightly. and, yet, some of the benefits from the tax components and some of the improving credit trends would say they still deserve a place in the portfolio overall. >> very quickly, before we let you go. switch gears. puerto rico. the governor saying they're going to run out of money early next year. are we going to see a wave of puerto rico defaults or more creditor deals made? >> we think there is likely to continue to be some individual defaults in pouerto rico. there's a big debate around the go and whether they can make january 1st go payment. we think a broad base restructuring is necessary whether that comes through negotiationors whether the federal government gets involved. they expressed a little more interest. we think muni bond defaults are contained within puerto rico. there's very little declining outside of puerto rico in the municipal market as a whole. >> john miller, john, good insight in muni and puerto rico. happy new year. >> thank you. >> another look at today's mystery chart. up 15% this year. it is teflon. the third hint, the pride of charm -- somebody already got it. >> i think that gave it away. charm city? >> yeah. >> amsterdam. >> what? >> it's a wire reference. >> oh. >> mcnulty would know the answer. first, why a yacht like this could be a big sell signal for one beaten down stock when the ceo buys that, sell the name, a big ceo just bought something like that, we'll tell who you and what it might mean coming up. and this year, look at what he put in our driveway. the lexus december to remember sales event is here. lease the 2016 es350 for $349 a month for 36 months and we'll make your first month's payment. see your lexus dealer. another difficult day for chipotle a day after the cdc says they're investigatinging a outbreak of a different strain of e. coli. there is a separate strain of e. coli. joining us is the director and research analyst with guggenheim partners. you downgrade the stock on december 7th. you say that 30 times forward 2016 eps was fair value range for the stock. that's where it is about now. does it deserve another hair cut at this point since it seems like the unknowns are growing. >> i agree. actually, i think that it's 30 times my earnings number which is a little over $3 below the consensus estimates right now. so i do think the consensus estimates are still very lofty. they don't account for the slower sales which are obviously occurring. the stores are empty right now. on top of that, there is also incremental costs coming in with respect to the new testing that they're going to do. so i definitely think the consensus estimate has risk. and that 30 times will be on the up earned of the fair value. i think a range of 25 to 30 times is more accurate. >> sounds like you think the stock needs to be rerated. why stick -- if you're a holder, that implies you stick with the stock. why not step back from it at this point? >> well, i think you have probably no more than 15% or so down side from these levels. i think in time it still represents a unique brand with very high returns. it is coming from an all time popularity. i think right now i would not put new money to work. i think can you buy better -- you'll have a better buying opportunity ahead. my greater concern would be that overall the space still with high valuations has a little bit of multiple contraction to happen. this is a company that's not trending right now as far as improving same-store sales. it will come under multiple pressure in the near term. long term, it's one of bert positioned companies for square footage growth. >> is there any wait e. coli, however serious it may be, we saw mcdonald's go through this a number of years. kind of masking other issues with chiptole's growth? >> well, i mean they have grown significantly. so to your point, the average weekly sales have grown over 15% in a pretty rapid time over a little over two years. and the stores are still opening at a 10% growth rate. demand is obviously down now. popularity is down. yet, they're still growing square footage. it does put at risk the new stores and the new store production tist. so i think that's a question that will be -- or an answer that will come as they open up these stores. i'm very cautious because typically when a company see this is degree of negative same-store sales, they pull back growth. >> matthew, who is gaining? we talked to a couple of analysts over the course of this xafrment a couple of them said panera. i notice it's up 11% over the past movement it is, in fact, a winner off chipotle's woes? >> it's one of them. chipotle is 50/50. so i would think that is a little aggressive to say that panera consumer is winning over the share from chipotle. you have everybody. it is everybody from a mcdonalds consumer to as well as something like a private company like subway. but also smaller quick casuals that just went public like habit burger. >> thank you, matthew. >> all right. up next, one furniture maker getting absolutely hammered right now. the disaster coming up. plus, last guess to call today's mystery chart. all right. it's up 15% this year. think teflon. the pride of charm city and your final hit, hit the goim do your planks. if you don't know by now, you should not be watching cnbc. we're back after. this sure, tv has evolved over the years. it's gotten squarer. brighter. bigger. thinner. even curvier. but what's next? for all binge watchers. movie geeks. sports freaks. x1 from xfinity will change the way you experience tv. welcome back to power lunch. i'm melissa lee. net app is buying solid fire for $870 million to bolster it's storage options. shares down 4.25% following the announcement on the perception this lowers the chances of a net app buyout. steel case after reporting an earnings miss they earned 32 cents a share in this latest quarter, 2 cents below estimates, the stock is down a whopping 23%. we have two members of the all time high club, public storage and harris corp. both trading at their highest levels on record. >> time to reveal today's myths ri chart. up 15% this year we referenced charm city, which is baltimore, we said something about planks. know the mystery chart is under armour. kevin plank the ceo. there you go, melissa didn't get the wire reference about amsterdam. either way under armour down from its yearly yer this year, despite being the, quote, faster grow company nike is eating its lunch this year, mikey stock up twice as much. >> under armour is more domestic and nike is more international and mikey is surging in today's session ahead of the earnings report after the bell. we will be watching that closely as well as sara eisen on fast money at 5:00 because the stock is one of the top performers so far this year in a hot space. >> i always say who is the next nike. maybe it's under armour. who is the next under armour. >> there's so many upstarts out there. so many upstarts. >> deep. up next, why a yacht like this one -- and for the people on the radio we're showing a yacht -- could set sail on one well-known stock. power lunch will be right back. here at td ameritrade, they work hard. wow, that was random. random? no it's all about understanding patterns like the mail guy at 3:12 every day or jerry, getting dumped every third tuesday. this happens every third tuesday. we have pattern recognition technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. for all the confidence you need. td ameritrade. you got this. lunch," i'm melissa lee, shares of gopro down more than 70% this year. now the company is making a big bet on gamers to try to turn the stock around, here is josh lipton. >> gamers can now get their fix of action packed video. gopro announcing today its channel will now be available on the play station 4 and play station 3. the app will allow millions of gamers to stream gopro content on demand. the hope for the bulls, that gopro releases a new camera that wows consumers, upgrades its software and sells more drone than the street expects. back to you guys. >> robert frank is with us here. the stock down just, you know, 70% this year, but nick woodman, the ceo, high school classmate of josh lipton just bought a yacht. >> he did instead, instead of goproing his surf boards he can gopro his mega yacht. he bought an a yaut somewhere between 30 and $40 million. the boat won't be delivered -- it can do a trans athletic trip, it's perfect for cruising the med or caribbean. it's got a pool, helicopter, touch pad, plenty of space to keep your jet skis and all those gopro tools. woodman has seen his wealth cut by 2/3. when he bought thor boat he was worth $2 billion now he's worth a mere $650 million. this boat a priced in euros so the strong dollar means he's getting al multi-million dollar discount. >> should be an fx trader. how much does it cost to maintain a boat like this every year? >> this is the rub. about 3 to $4 million a year just to operate. >> a boat is a big hole in the water into which you pure money. >> sometimes if you encounter the crew of theseouts, i was talking to the crew of one of these megaouts of some billionaire, i asked that question, they said, here is a good rule of thumb, when you turn the key on it's a million bucks. with feel, all the crew -- >> fuel is a lot cheaper now. >> you're dropping a million. >> he's not taking delivery until 2017 so he has time for the stock to come back up. >> a lot could happen between now and then. >> i worry whenever a very rich guy guys a sports team, i worry a lot more about that than i do when they buy a yacht but there was a study that indicated when guys go off and buy expensive toys they may not do so well. >> the stock doesn't do so well. there is a study or everything including the fact when ceos buy a ferrari or yacht or big, big house the stock underperforms. now, it was a small sample size, there are plenty of ceos that have bigouts, larry paige, barry dill lard, they are great ceos and they haveouts. you can find kparms on both sides, but, yes, this is -- the timer of this is a little tough for shareholders. >> does it matter what percentage of wealth they're spending on a ferrari or a yacht? if it's a drop in the bucket it shouldn't make a huge hf chunk. >> but 40 million of 640 million is pretty big. >> one thing to buy a yacht when you're worth $2 billion. >> you design theseouts, they call it the big house indicators. they keep -- i don't want to block melissa. they keep, you know -- now i'm all screwed up with my thoughts. >> it's a distraction. >> what color carpet and then you're not focusing on running the business, you're building a mansion. >> a good year you're spending two to three weeks max on a yacht. >> that's a pretty good year. >> the cost/benefit analysis, to spend $3 million on something you use two, three days that is a huge amount of money and it's a big distraction. you don't see guys mic mark zuckerberg buying yachts. >> we pan this idea. >> they can do what they want with their money. >> somebody who is worth $650 million to buy such a big toy. >> hole yer than though, i'm going to say it, if i could afford it i'd buy a yaut. >> overheader. >> if you can afford to have a yacht like that you would be doing gopros off your hot tub. >> that's over 100 ferraris. >> if i had the money to buy that yacht i would also buy a ferra ferrari. >> if it floats, flies or the other thing it's better to rent. >> floats, flies or -- >> what's the other thing? what's the other thing, robert frank? >> it's time for the other show, isn't it? >> thanks so much for watching. i will see you tonight on "fast money" at 5:00. thanks, guys. >> good to see you. >> "closing bell" starts right now. hi, everybody, welcome to the "closing bell." i'm kelly evans here at the new york stock exchange. >> and i'm bill griffeth. stocks climb today, a pretty good rally going here, crude oil prices stabilized, an interesting development in crude oil which we'll talk about, but watch out in the equity markets. cnbc contributor and long time bull jack ber ush yan is warning of a 20 to 30% correction in the u.s. stock market in 2016. he will be here to continue this warning that he first issued last friday on this program last week, floored all of us. >> we will see now that he