Transcripts For CNBC Power Lunch 20160419 : comparemela.com

points and the s&p, moving the monitor so i can't see it. >> up three-quarters of a point. >> and the nasdaq is lower by 31 points. where are we headed to from here? let's get to bob pisani on the floor of the new york stock exchange. bob? >> hello, michelle. we're flat because ibm has been a drag and tech has been a drag and the question is can we hit new highs and the key, remember, may be earnings. markets have moved up. they have been a floor under the market and the market believes that, off the low and china hasn't gone away and it's been a lot quieter. earnings have been the big problem and the missing ingredient. we've had four consecutive quarters of negative earnings growth right now and q2, the one that we're in now that everyone is talking about, only down about 3% and it's been stable in the last week or so. not reducing the numbers anymore. we could go positive meaning that ends. johnson & johnson and philip morris raised their guidance on the weaker dollar helping how the. this week it's going to be about the drills. caterpillar and honeywell and ge on friday, and tyler, if any of these companies, particularly jeff immelt says on friday, you know, the global economy is looking better than we thought, we could easily hit new highs. tyler, only 300 points away on the dow industrials. >> bob, thank you very much. bop pavelec, boston private yet and team seymour cnbc contributor and gentlemen, welcome to both of you. tim, let me start by asking you, and i know you've been following. bob just mention the the importance of the industrials as catalyst or a catapult to higher numbers on the dow. what do you think. >> i think that's very opponent that you get cyclical involvement and rallied back and people understand that you have some grew and what's interesting is we're having a very interesting and, again, a very -- a doubted rally in the commodity space, the resource space. these stocks continue to move higher and the prices for the underlying spots and ingredients, whether it's iron ore or agriculture or wheat, you name it. we're actually seeing some rebound wlmpt it'sand whether i weaker dollar or real, need to take the market to another level. until that happens there's a lot of doubters. the path to least resistance has been higher. >> keep an eye on the industrials that have been reported, as bob pointed out, including ge, and so forth. bob, do you see a higher dow between now and the end. year, and if so, by how much? >> the dow is bound to go higher. now, we look at it from an s&p perspective, and, you know, we're trading at around 2095 on the s&p which is around 17.5 times and people think that's an expensive pe multiple. when you look at it from going back to 1871 when the pe has been averaging around 14.5, 14.7 times, yeah, sure, but when you look at it in the last 16 years, the average pe for the s&p 100 has been 17.9 times. that could take to you 2150. if you look at the last 30 years of the pe for the s&p 500, that means the market can go to 22 and 20. 6% higher from our current hires. i think you'll run into a little bit of resistance, first around 2100 and then around 2110 and the biggest resistance is around 2130 and we get back to the 2220 level, about 6% from other and i think you'll really want to focus on the quality names and especially the names that haven't performed as well as some of the others in this market rally. >> stitt tight for one second. want to bring in cnbc contributor larry mcdonald and stop me if you've heard this before, but larry says greece could derail the bull run, explain that, larry. >> well, the thing that we've seen with -- since 2011-'12 with greece, there may hab solution in the end, but there's high, high drama before, and on march 10th mario draghi was staring down the barrel of $11 trillion, $1.trillion of non-performing loans in euro. in july we have a $2.3 billion debt maturity in greece, 2.3 billion, so we have a large debut maturity. they need help from the imf. the imf has pulled away so there's going to be high, high drama once again before we have a resolution which sets up for june/july drama. >> feels like the boy who cried wolf every year. we go down this path and it all ultimately, there's a wringing of hands and nashing of teeth and wailing. you've been there, and there will be demonstrations and you've been there. >> just so everybody knows. you can predict a greek debt crisis by looking at the calendar. and it speaks to how poor greece is that we're talking about 2.3 billion euros which in this world isn't a lot of money, but apparently they don't have a lot of money. >> we've been through this. you look back. we had a 10% correction in 2010 and a 4.5, 5% correction last year on this drama, so markets do react to it, and i think the bottom line is you've got to understand the contagion. it's not greece. portugal. you have a leftist government in there coming in, leftist, they are pulling away in many respects from responsibility to the european union financially, and same thing in spain, and then you have two months ago in this network, team seymour were buyers of the banks and everyone was telling us they had all sorts of exposure. >> bob, you're fairly bullish for what you're expecting. are you worried that the greek debt crisis potions an extension threat to the eu and we have a horrendous amount of instability and potentially a lower market? >> there's plenty of potentials out there. i think greece is a little bit further on down the road and something that's not on my radar right now. you know, maybe puerto rico is an issue and maybe all this hawkish talk by the federal reserve presidents could scare the markets, you know, could be sell in may and go away and then we have a fed meeting in june and there's plenty of potential. >> wall of worry, everything it sounds like, but i'm not really concerned with greece sonar because we've been able to manage the problem and i don't think it's going to be an issue and, you know, nothing to the other guest, but i think what we really have to focus in on is really what's working. have an environment here in the united states that's actually begun to stabilize and show improvement. >> guys, we've got to run. thank you. >> gentlemen, that's it. >> larry, bob and tim seymour thank you very much, and look who has arrived. tilman fertitta is here. welcome to cnbc. >> welcome to cnbc. >> saw you last time in seattle. >> of course, the chairman of landry's golden nugget casino hand host of cnbc's "billion dollar buyer." with be us for the next -- didn't have to wear a suit. >> put on a tie today since i'm in the studio, not out there running the streets. >> so let's -- let's talk about the businesses that you run. we talk broadly at sort of 30,000 feet about the market. tell us about the economy and how consumers are doing. what are you seeing in your businesses these days? >> what's really interesting is same-store sales for the restaurant industry, which is such a growth industry in america, was negative in march for the first time in a couple of years. >> why? >> i think the consumers are a little scary right now, and i also think that everybody wants to open a restaurant right now, too. >> mm-hmm. >> i think it's a combination of them both. >> so maybe too much supply. >> definitely too much supply. >> and a pullback on demand for some reason. is it the election, all the negative talk. economy during the election? >> i think there is a pullback, and i've always said when you've had great same-store sales growth for six years in a row, positive 2%, 3%, 4% where your sales have grown 20%, you're not going to keep growing every single year, and i think march was the first year you're really seeing it, the first month that we've seen the pullback. >> you must know day by day, almost minute by minute, how your stores are doing. how are they doing in hape? >> pretty good in april, you know. better, but march wasn't bad. don't get me wrong. >> right, right, right. >> but it broke the streak. >> you're darn right it did. it's just choppy now. it's not that, you know, all hands on. it's definitely choppy right now, and the whole >> what do you attribute it to? i mean, somebody inevitably is going to say, well, gas prices went up in march, and so, you know, gas people had less money in their pocket to go and dine out. >> by people are so used to, so much less than it was and everybody does have a couple thousand dollars more to spend. >> mm-hmm. >> of course, and in the south you might be feeling it a little bit, just because of the oil and where it is and there is layoffs, but i -- i still don't think the whole overall economy is where it was, you know, 12, 18 months ago. >> is had a ditto for the casinos as well? >> no, that's what's unusual is the casinos right now are doing pretty darn good. they are still got a pretty good same store sales growth. that's interesting. really just the whole restaurant industry just kind of fell back a little bit. >> also have to remember easter was in march and not april. >> hold hon one second. >> got to do some breaking news. sue herera is standing by with that. >> thank you so much, michelle. we want to show you pictures of a large brush fire as you can see in secaucus, new jersey. what that has done is caused amtrak to suspend service for the northeast corridor, specifically between new york and philadelphia. new jersey transit is also suspending its service at this point. we're under a brush fire alert in this particular area. we have hot temperatures, very dry weather today, and all this week. it's expected to be dry until dry until friday and it was a frush fire warning. looks like that is what has broken out here. in the forefront of your picture that's secaucus, new jersey, the skyscrapers that you're seeing, that's manhattan right across the hudson river so you can imagine some of the office workers taking a look out the window seeing that in new jersey. right now amtrak service for the northeast corridor between new york and gilly is spouse spended and also new jersey transit which may make commuting at the rush hour on the way home tonight very, very difficult. we'll keep you posted because that's a story that will affect an enormous amount of people. back to you guys. >> sure will. thank you, sue. tillman, reaction to some news that we want to talk about today. the price of oil is moving higher. oil workers are on strike in kuwait, stretching into the third day. the kuwaiti workers walked off the job to protest the public sector reform. it's just under 50% to 1.5 million barrels per day. they are not carrying picket signs. >> happy strikers. >> sitting around drinking coffee, taking selfies. you have a lot of businesses and areas and you mentioned where oil is a big factor. what are you seeing when it comes to the price of oil and the movements? >> the problem is that's what happened yesterday, just like the meeting this weekend, but what's going to happen next week and at a meeting that they call a month from now. i don't think any of us know what's happening with oil over the next six to 12 months. until it starts being a bull one way or a bear another, i think you'll continue to see it trade between $30 and $50. i don't see it going up much over 50 and don't see it going below 30. can always spike for a couple of days, just like it did, went down to 28, 29 for a week and then it bounced right back up again into the mid-30s. i think you're going to see this trading range for at least the next 12 to 18 months. >> you'll be with us for the next two hours. that's our pleasure and you're bad luck. appreciate you being here, and you'll contribute throughout the program. 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(announcer) over 400,000 businesses have already used ziprecruiter. and now you can use ziprecruiter for free. go to ziprecruiter.com/offer6 welcome back to "power lunch." live from the emerge america's conference in miami beach, florida. joining me now in an exclusive is bob gryfeld, ceo of the nasdaq. so much to talk about about market activity. goldman sachs reported trading revenue fell by 37%, underscoring the trend that we've seen for most of the banks this earnings season so far. what can you tell us about trading, whether it's picking up, whether there are signs of life here? >> well i think, you know, to break it down between fixed income and the equity markets. extill market trading was somewhat robust, certainly in january and february, but with the current interest rate environment we've seen hampered and going through some difficulties. >> in terms of the activity you're seeing as an exchange operator, trading of equities is still robust in your view. >> very robust january and february. probably in a normal phase right now, but certainly not bad, and we hope to see it improve >> is that good news for the ipo market? had the slowest period since the first quarter of '09 this first quarter. friday is going to be a key test. >> yes. so certainly i believe the indices and the ipo market will track over time. not in a given moment but certainly over time and we think the ipo market is poised to do well, certainly secure works, as you mentioned, this friday could be a harbinger of an improved market. we have over 100 companies in filing. most of those files i think are dead serious about it. cautiously optimistic. >> right. biotech was a huge driver of the ipo market last year. >> yes. >> is it going to come back in your view? >> i think so. i think the number of diseases throughout there and the fact that we've mapped the genome a decade ago, immunotherapy, really in the first or second inning of what it can be do for human beings and their health so biotech will continue to be a strong driver going forward. >> just saw bats go public. is that going to increase the competition for what's already so few ipos in the pipeline at the moment? >> i don't see them as an ipo competitor. i think it's primarily between us and the new york stock exchange, but certainly we compete hard for every ipo and we'll continue to do that. >> right. we're on a panel earlier today and talking about nasdaq private market as an alternative to going public. are you seeing activity on private market pickup with the slowdown in the ipo market. >> certainly seeing private market activity pick up merrily dramatically. over 100 companies with mpm. started a couple years ago. fairly dramatic. most of the unicorns and decacorns. >> what's that? >> 10 billion. >> yes. >> we've seen most of those do some activity on the nasdaq private market. we think that will continue. we certainly have a feeling that not every company should go public and it will give them a vehicle to go public/private. >> last question here. the indices are a few percentages away from all-time highs at this point. does this concern you? >> i think the backlog is furmg up so no, it doesn't. the indices are obviously high because there's people looking for returns and hard to get that in a fixed income environment the way the markets are today so i think it ties all together. >> bob, pleasure to so you. >> my pleasure. >> bob greifeld, ceo of nasdaq. later on this hour i'll have an interview with by the pull, call him whatever you want, a recording superstar and that at 1:30 p.m. from emerge. >> tyler? >> and i think i was mr. worldwide, dag gone it. >> one of the legendary barbarians at the gate who helped define wall street in the 1980s practicing what he calls friendly activism. if that sounds like an oxymoron you are not alone. we'll ask him about that and more straight ahead on "power lunch." ♪ the intelligent, all-new audi a4 is here. ♪ ♪ ain't got time to make no apologies...♪ i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. 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[ male announcer ] join the millions of people who have already enrolled in the only medicare supplement insurance plans endorsed by aarp, an organization serving the needs of people 50 and over for generations. remember, all medicare supplement insurance plans help cover what medicare doesn't pay. and could save you in out-of-pocket medical costs. call now to request your free decision guide. and learn more about the kinds of plans that will be here for you now - and down the road. i have a lifetime of experience. so i know how important that is. . welcome back to "power lunch." i'm david faber at the active passive summit here in mid-town manhattan joined by cliff robbins, the chief executive officer and a so-called friendly activist that we'll get to in a moment. you do a lot of work in the mid-cap space and this morning you mentioned a new space that i would like to get to, adco in, your portfolio already when you look at your files, a fairly large position for you. why do you like this agricultural equipment maker in. >> we own 2% of the company, dave, and first we like the industry structure, an oligopoly and three principal players around the globe and companies can take price in weaker markets and like the business dynamics. population is growing and protein consumption is increasing, so agricultural equipment is a good business to be in. this particular company is doing all the right things. they are improving their margins and getting on a common tractor platform and a fabulous deal and network and participating in europe which is really a stable and growing prarmarket and the company is underlevered and they will be looking to buy back stock so a lot going on with this which is. >> they are largely in europe, correct? >> yeah. >> and i wonder given the economy there, there's no more being creative of it and when you have an economy growing as slowly as europe you would wonder if that's not necessarily going to spill over. >> it's less about the economy but more about the smaller nuclear arms in europe and an aging fleet of equipment so farmers will need to buy more, and -- and farmers are doing fine in europe. the european farming business has been rather stable, underearning and more upside there and adco, while they are are also in the u.s. and brazil, they make principally all their profits in you're. we like the stability of the european farming business as well as their other geographic call footprint. >> what's the footprint? >> 12 times ekeda and 14 times earnings and the company is underearning. we're in a trough period of earnings. this company probably has $5 or $6 had a share of earnings power, earned about $3 a share now, so in addition to liking the business structure and the ole gonely, i like the point in the cycle that we're in. we also have a really strong dealer network and that's really, really important because farmers usually only harvest once or twice a year and if you're doing your harvest and your equipment goes down and you need to have it repaired and need a dealer to rely on to replace that equipment immediately. it's a real strategic asset that adco has. >> and you style yourself as a friendly activist means you don't engage in proxy fights and you actually check in with management and if they agree with some of the things that you're willing or want them to do you might invest so explain to me in the case of adco where you have an 8% position what has that meant? >> really an important point about blue harb 0 r and i spent seven years at kk atlantic before i started blue harbour 12 years ago and we have very much a collaborative way of investing. we don't like the management team and if we don't think they are smart and hard working and looking for ways to win, just like a private equity investor, we won't invest. sizing up the management team and getting to know them is very important to us. in the case of adco spent a lot of time with the chief executive officer before we invested, examined his record and had some mutual points of contact and we came to the conclusion that this gentleman was the type of man we wanted to back and looking for ways to win right now while business is a little soft and working on his margin profile as he should be to improve the margins in the business. i think he's open minded to buying back stock and has a very strategic strategy as well and investing behind strong management teams is very important to us. >> i wonder though, you mentioned private equity, of course, which has hold times which can be as long has seven years if there's no exit or longer perhaps if the ipo markets aren't cooperating or any number of other things. what's your average hold time and can you get as that's the would match what would seem to me to be patience in part of your investor page? >> when you talk to a public company's show, that sounds like forever. most public market investors are trying to get an edge or earnings call, that's for this quarter so we're investing for two and a half to three years which we feel is plenty of time for the company to make meaningful strides in unlocking value and our investors which are endowments and pensions and strategic wealth funds similar are on course for three years at a time. we're not reliant on an ipo or even the sale of a company. >> although you would like an m & a opportunity oftentimes would i bet? >> oftentimes and we do find ourselves positions in that and that comes back to our private equity way of investing. we save every company we're going to invest in, if it were a private equity fund, would we buy this fund? would we buy the whole company? are there levers and even a lot of the companies we exit in the market the way we got it. we have large stakes in companies that other buys couldn't. >> we appreciate you visiting with us. >> good to be with you, dave. >> michelle, back for you. >> david faber. coming up from miami, pitbull live. ♪ don't stop the party over 100 years ago as a benchmark for average. yet many people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? it's time to bench the benchmarks. hello, everyone, i'm sue herera and here is your cnbc news update for this hour. dramatic photos from ecuador as rescuers pull a man out alive from the rubble of a collapsed hotel following the massive earthquake over the weekend. the man had managed to call a relative from under the debris from his cell phone to tell them that he was still alive. a very happy ending there. pope francis delivering a powerful message to ref fees asking for forgiveness for society's indifference to their plight. his comments came in a brief video message delivered in honor of the 35th anniversary of the establishment of a jesuit center for refugees in italy. democratic presidential hopeful bernie sanders walking the streets of manhattan today. he was joined by his wife jane. he responded to a comment by hillary clinton which implied she could wrap up the nomination tod today. >> i'm afraid she's going to be disappointed. we're feeling very good. there is a large voter turnout despite the impediment of 3 million people not being able to participate. i think we're going to do just fine. and longtime actress doris roberts has died passing away in her sleep overnight in los angeles. she won four of her five emmy awards for her role as the meddling mother in "everybody loves raymond." she was 90 years old. and that is the news update this hour. guys, back to you. michelle? >> yeah, she was fantastic. >> she really was, a great actress. >> dollar weakness today leading to strength across the metals complex. gold right nowshire by 1.5%, 19 bucks. take a look at silver, sitting at a ten-month high here, a gain of 4%. had been up as much as 5%. copper higher by 3% and palladium 2% and platinum nearly 4%. once again as we see dollar weakness. to the bond market now where rick santelli is tracking the action at the cme. richter. >> thanks, michelle. >> if you look at intraday ten, you see the action for today and for a while. once again, we had a pop over 180 intraday, 180.5, to be exact. that was the highest intraday yield since the 1st of april, but we're back down unchanged at 177. open the chart up to the 30-of-the-march because that's the last time we closed at or above a 180 yield. michelle nailed it. the talk today of course in front of ecb, dollar weakness or euro strength. let's concentrate on the euro side. it is 57% of the dollar index. euro versus the dollar creeping up and open the chart up to early october. you can see we're not only at a critical zone but we're probably getting a glimpse into a little bit too aggressive short on this contract because probably draghi, i think the quiver is probably not going to fire any new arrows. tyler, back to you. >> mr. santelli, thanks very much. back to melissa lee at the emerge america's conference down in miami beach. melissa. >> well, tyler, look who is joining me here on set, armado christian perez, aka pitbull, mr. world wide, mr. 305. >> a lot of names. >> good to see you again. >> thanks for having me. really appreciate it. thank you for, like i said, the support here. it's just amazing to see the growth down here. >> most people don't think of you. they think of your music first and foremost but you're also a business person. you're a supporter of entrepreneurs. >> correct. >> why are you here at emerge? >> i'm here at emerge because i have a lot -- i can relate with entrepreneurs, businessmen especially being in the music business because every time we come up with a new idea or record people are constantly telling us how it's not going to work, it's noted a goosed a before and to have a state of mind of an entrepreneur is always believe in yourself and have great partners and always find ways to push through and the next thing you know, look like a genius with a great record and have a great business and nobody believes in it at first. i come out and let people to know i'm going through the same struggle and hustle and fight every day. >> yeah. you've said in the mast it's 10% talent and 90% business when it comes to being a recording artist these days. a big part is how the content and music is being delivering, streaming and surpassing downloads, artists don't get paid a lot on streaming but you're all for streaming. what is that? >> i'm all about change and modifying, but i'm also about being fair. now, i think that it's a gray area right now called an international waters what's going on with streaming, and i feel that one way or another it may take another three years, maybe 3 to 5, but there will be a different business model for artists to get paid out differently. especially being that the labels are mild in on the streaming business, of course, this is in their favor and we appreciate the opportunities, but at the same time we also appreciate and go back to the word just being fair, so when you have labels on a spatify, pandoras or vivos, i think we should indulge in that also. >> a lot of competing platforms. apple has its own service. there's also title which is a new subscription service. >> congratulations to jay-z, just talking about entrepreneurs and that's somebody constantly always knocked down no matter what he's tried to do and imbeing where he's front and relate to to a certain extent. i'm rooting for him. i'm rooting for. >> what are you rooting for in terms of the platform and how you want to deliver the music? >> i'm rooting that it took jay-z, taylor swift took a step back and said, hey, this isn't fair what's going on in the music business right now so someone such as himself and the kind of i would say clout he brings to the table and power he holds, not only as a musician or an artist but also as a businessman, for him to come back, it's almost like just rooting for the underdog, you know. >> right, right. >> that's what i love about what's going on and with all the negative press i know he's doing something right. wouldn't want to be throwing nothing bad at him if they feel it's something that could be potentially, in other words, dang row. >> you're a true entrepreneur. you've got so many things going on. >> thank you. >> you signed a deal with a production company to develop content. >> yes. >> there's a series fox just bought 505, a miami-based series. when you think about things like that, that sort of content, there's also tremendous shifts in how that contempt is being delivered. do you need -- do you think you need a network these days? can you just go netflix or hulu? how do you look at it? >> the way i look at it, what the deal with knocks and thing with 305, they didn't take it but mtv took it and it shows things happen for a reason. >> sure. >> i talked to 250 million people monthly. i have 9 billion views collectively. >> 9 billion. >> 9 billion views so i'm the new age billionaire, got 9 million views but nothing to show for it. no, i'm just messing with you. we stepped to fox, we sat down and said we're a walking network. we bring in more numbers than you do so we should be partners on this at the end of the day and that gives us a lot of leverage. the true thing is, i hear people talk about engage, activation and then call to action. that's what we're looking for, the true call to action, how i can engage or activate the 80 million people we stiblg to daily and really move a percentage of them. >> that's what everybody is looking for, from your facebook to twitters and instagram, you name it. >> and that i think is the matrix. >> lever the social presence on to other medium. >> i want to bring in our old friend tilman fertitta who is a true billionaire, billionaire buyer's fame here on cnbc. >> hi, armando, how is it doing in miami? >> good, good, good, miami is great. miami is great. >> listening to y'all talk and armando is one of those guys, you know, and i say it during my show, who wants to know his numbers and we sit down and talk about his spirits business and how he wants to grow it, and this guy is a real business guy really trying to grow something, and he's not only an entrepreneur in music, but what he wants to accomplish out there in the business world. it's something we all -- all want to do. >> well, definitely means a lot coming from you. congratulations on the new shoe, number one. number two, i've got a bunch of opportunities that i would love for you to invest in. got to have some talks. >> we should broker a deal. tilman, do you have vodka in any of your properties right now? >> we do, but i know armando's people were in my office last week and we're trying to do more business together. i mean, he's got a great product. it's a product that everybody ought to really try because it really is a low-fat better vodka, and i've -- i've had it with him a few times down in miami, and i was -- i was just showing my host here a picture of us one morning drinking some. >> one morning. >> one morning. >> don't let tilman fool you. >> a lot of information here in this interview. >> i will tell you, it's a great vodka. >> hey, armando, it's michelle here. good to see you again. >> hey, michelle, how you doing? >> good. i want you to repeat a story that you told us in the documentary that we did here at cnbc. you have a great line in one of your songs. >> yeah. >> which is ask for money, get advice. ask for advice and get money twice. >> get money twice. >> money twice. >> how did you come up with that? >> well, that was actually a 21-year-old kid that was pitching startups in silicon valley that told me ask for money and get advice, and i said ask for advice and give money twice so i want to say thank you to him. i really appreciate it and then it ended up in the song but it's the truth at the end of the day. people are so quick to ask for the money and say what do you think if we moved in this direction, what do you think about this opportunity? how would you handle it and then take whatever answer that's been given to them and apply it in their own way. that's what we do in music, grab records that are big 10, 15 years ago and then we just remix. you know, we're not trying to reinvent the wheel. definitely, everybody out there is looking for a way to grow capital, ask for advice. >> great advice. thanks so much. >> enjoy miami and tilman, thank you so much. michelle. >> armando christian perez, aka pitbull. >> tilman, you don't always drink vodka in the morning but when you do at 9:00 a.m. >> it was like 3:00 in the morning. >> 3:00 in the morning. >> not 9:00 in the morning. >> he had been up all night. >> i see, i see. you're mr. 713, so 713 and mr. 305. >> yeah, of course. >> we're 713. i think that's the product. i'll give it to you, 713, 305, that you go. >> tilman is sticking around for the rest of the show so make sure you stay around for that and check the show out tonight, new episode of "billion dollar buyer" premiering at 10:00 p.m. eastern and pacific on cnbc. that was the wrong promo. >> we will get you -- there it is right there. all new tonight. dressed in his more traditional black and today wearing the suit and tie. >> why did you wear the suit? >> it's good. it's all good. all right. still ahead. they say it never rains in southern california, but it rained money in los angeles literally this weekend. we'll tell you why straight ahead on "power lunch." those aren't benjamins, they are washingtons. 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"credit karma. give yourself some credit." take a look at this. are bernie sanders making it rain on hillary clinton's motorcade over the weekend. the group tossing 1,000 $1 bills as show arrived at actor george clooney's l.a. home. the money was provided by the founder of the 99 cent store. he's a neighbor of george clooney. he did it in protest of what he calls the absurdity of campaign finance laws. reaction now from tilman fertitta who is still on set, cnbc's larry kudlow and former labor secretary robert reich. i'm going to start with you, mr. secretary. what do you make of that, too much money involved in politics? >> of course there's too much money and george clooney was interviewed about that fund-raiser where couples could get a chance to sit down with the clooneys and also with hillary clinton for something in the order of $350,000 a table or maybe a seating and he said it's absurd and obscene. if he thinks it's so absurd why did he go ahead and do it? think there's sort of an oddity there. no, it is obscene. >> i'm actually -- did is it my turn? >> yeah. >> i'm going to come dangerously and alarmingly close to agreement with robert reich, okay. this is really bad. but my -- my beef is not quite the same. i think free speech, you should be able to put as much money into the political process as you want, anything you want, but, but, but, but, but. i am opposed to the super pacs which hide the donor. >> i am so with you on that, larry. >> what my take is you want to give $1 million to somebody, it's a free country do, that, but within 24 to 48 hours, immediate posting on the internet name, license plate, social security number. >> who is really giving the money to the group. >> the interesting problem, and the interesting thing is that should be completely abolished. >> i agree. >> we can only give $2,700 a person and $54 per couple and give $10 million to a super pac. tell us what we can give. >> and the 10 million -- >> in other words, fess up who they are. >> hey, robert, i was just going to said supreme court in that infamous case, citizens united 2010, assumed that there would be full is disclosure. >> right, right. >> that was the premise of the entire majority opinion and we've not had full disclosure. every full disclosure bill that's gone to congress and republicans have said no and some republicans and primarily republicans, they don't want full disclosure. >> here's the one thing, if money bought you an election, mitt romney would be president. >> jeb bush would be the from uner. >> jeb bush would be the front-runner. >> everybody gets all upset about money in elections, but what have we learned in this series? >> money doesn't get you there. >> hillary clinton and bernie sanders. >> bernie sanders has plenty of money. he's got $45 million or something. he's going to be around a while. >> but at first he didn't. >> again, i think disclosure. this is where i dangerously agree with robert and i guess we all do. disclosure is so important. if you want to be free, be free, but you've got to disclose. you just have to disclose. >> i don't think you can look at modern elections and come to the conclusion that money doesn't matter. people would not be investing as much money in these elections if they didn't think they would get something back from the elections. >> why didn't mitt romney get -- why didn't mitt romney win? why didn't jeb bush become the nominee? >> i think that what you see is money is very often necessary but not sufficient, and then occasionally you have the bernie sanders candidates who come along and this is very, very rare. i mean, it's big news because it's so rare when you have a candidacy built entirely on small contributions. but there's nobody who has been involved in american politics today and recently who doesn't think that money has polluted the entire political process. washington is engulfed in money right now. >> see, yes. by the way, this whole business about the k street law, that's why i want tax reform. want to end all those special favors, loopholes and corporate welfare and crony capitalism and what really bugs me, back on the narrow issue. you've got your super pacs, nobody knows who is running them, nobody knows who is financing them and all they do is negative. in other words, negative. pounding trump, pounding whoever and whatever they are doing. you have no idea who they are and they are contributing negative thought, negative spin. it just makes it a dirty process. again, i want free speech. just fess up and say who you are. you should be able to give donald trump $1 million. just have to disclose. >> it ought to be truly transparent so that -- you can put your money where your ideals are. >> hillary is going to win anyway today. >> going to win. >> going to win tonight. >> romney wanted to pretend he didn't have money. he wouldn't fess up. i'm a rich guy where trump has, and i think that's -- >> which is cool. >> which is cool for trump. >> yes. >> romney -- >> romney ran from it and obama killed romney for that. by the way, that was an important key in that election. >> and can i just say one of the big attractions, according to trump voters of donald trump, is that he is so rich he's not having to take money. >> right. >> and a lot of people are attracted to bernie sanders for very different reasons and one. reasons they are attracted to him he has all of these small donations, not taking big money. one of the biggies tenets of the kind of insurgent anti-establishment revolution going on, both against the republican establishment and the democratic establishment is all the of this money that is coming -- a lot of it is disguised, absolutely right. a lot is corporate money. corporations don't want their name to be associated with this so they -- so they pretend that they are not involved. >> and i love rich people. >> no, no. i love them on the show hand love everything about you. yeah. it is interesting though, let's just have a little different spin. let's say after tonight's primary, and we're going to have a whole bunch of them coming up. let's say mr. trump comes to cleveland 100 votes short, there could be a lot of free memberships to mar-a-lago. now, i don't know anything, just a reporter, mind you. but he'll be a very good negotiator whereas i don't think mr. cruz has those resources, and i know mr. kasich doesn't have those reshoreses. >> would you like to go to mar-a-la mar-a-lago? >> i don't think i'll be invited regardless. >> hey, let me ask you this. okay. no money in politics. as long as the unions can't donate money. how do you feel about that? >> i'm sorry. >> unions can't donate any money to the democrats? >> well, look it, the union par tus paite pace, all. data shows that union participation in elections has dramatically fallen, and so that if there is going to be campaign finance reform again, i think the democrats would say, sure. if we can control corporate finances and also donations by billion airs we'll limit union contributions as well. this is not, you know, your grandfather's or -- >> you can't have a union worker who actually works for a campaign, like we've seen in the past, where unions actually take their employees and put them on the campaign trail with candidates? >> individual unions who are actually -- you're talking about two different things. one is corporations or pacs or unions that are getting out the vote, that are actually working. that is very close to a free speech issue. i mean, if you want to get out the vote, you can get out the vote. >> why shouldn't we have worker freedom, seriously? worker freedom. the public service government unions are flying high. they are the backbone of the democratic party, including the teachers union. now the question is such as in wisconsin with governor scott walker who put an end to this. why should they be forced to pay dues to a union that's going to use that money for the union agenda, not necessarily to help the actual worker? >> larry, you don't you're setting up a straw man. in the fredericks case, that just went to the supreme court, twaks not about people having to support a union's political agenda if they didn't want to. it was about whether people, union members, could be charged for a particular service that the unions were providing those people in terms of collective bargaining, and that -- if people cannot be charged, if union members cannot be charged for the service that a union provides, then -- >> that's the death knell of unions. >> that's a very different issue. >> can't use it for political lobbying because that's what they do. come on. that's what they do. >> wait, wait, wait. different issue. >> we're coming back. >> and also corporations -- >> we'll be back. >> have dinner at one of tilman's restaurants. the five of us should go out. >> there you go. secretary reich has a book out called "saving capitalism." and i'm sure he'll be back next week to promote it, too, and we're excited about that. always great to have you, mr. labor secretary. we'll being right back. the e-class has 11 intelligent driver-assist systems. it recognizes pedestrians and alerts you. warns you about incoming cross-traffic. cameras and radar detect dangers you don't. and it can even stop by itself. so in this crash test, one thing's missing: a crash. the 2016 e-class. now receive up to a $3,000 spring bonus on the e350 sport sedan. freshly made in the japanese tokyo-sttradition.noodles. when you cook with incredible ingredients...you make incredible meals. get your first two meals free at blueapron.com/cook. everhas a number.olicy but not every insurance company understands the life behind it. for those who've served and the families that have 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. wrely on the us postal service? because when they ship with us, their business becomes our business. that's why we make more e-commerce deliveries to homes than anyone else in the country. here, there, everywhere. united states postal service priority: you mary buys a little lamb. one of millions of orders on this company's servers. accessible by thousands of suppliers and employees globally. but with cyber threats on the rise, mary's data could be under attack. with the help of the at&t network, a network that senses and mitigates cyber threats, their critical data is safer than ever. giving them the agility to be open & secure. because no one knows & like at&t. welcome back to "power lunch." i'm michelle caruso-cabrera. the dow continues to climb today after crossing 18,000 for the first time in nine months, 18,240. today the s&p getting back to 2100 for the first time since september. almost there. 2099 the, just a point away. which stocks have led us back to dow 18,000? dominic chu knows. hey, dom. >> i do know. let's take a look at the big road back because since the february low, the dimon bottom, when jamie dimon bought his stock back, the dow has rallied by 2,400 points to the upside to get us back to that 18,000 mark. as for the best performing stocks between july 20th, 2015 and yesterday's close, the two times that we last saw a close above 18,000, you want to check out fast food giant mcdonald's. up 32% gain in that time frame. home depot is up 20%. the two biggest lag yards during that time. american express and goldman sachs down by 20%. now, a lot of things have changed since july of last year and this year. check this out. back then oil last year, if you will, $50 a barrel and closer to 40 bucks today. ten-year government note yields. today, again, 1.77% and back then it was closer to 2.4%, so a big difference in thwaites and then here, the japanese yen just for one more measure, back then, 124.26 yen per dollar and today closer to 109, so a lot of things, tyler, have changed in that amount of time, but still a big march back to the 18,000 mark. >> thank you very much. can investors still find value in this market despite the run-ups? with us john buckingham chief executive officer of afamiliar capital and joe tenney, investment strategist at bessemer trust. gentlemen, welcome. joe, let mow start with you. is there still value? is there the time for value? do you prefer it over growth, and where do you find it? >> i think there is value in the market, but you have to be very collective considering where valuations are at. i mean, right now you have the s&p 500 trading at approximately 17 times forward earnings. have to temper our expectations and having sailed that there's clearly a lot more stability in the market. oil prices feel to see some kind of a bottom and have rallied, data out of china encourage and expectations for a fed rate hike have been pushed back a little bit. there are opportunities and it comes down to being selective and finding the right securities. >> value but harder to find. >> how but, john? what do you say? >> well, i pretty much say the same thing. you know, we've had a great rally here off of the lows, but there's still many stocks that are well off their highs so it's always market stocks and not just the stock market and even on a day like today, right? we see ibm down substantially but the overall market doing well and tech stocks getting crushed in some instances. >> so six months ago you probably, i'm guessing, would have shade, john, that mcdonald's was a value stock because nobody was really loving mcdonald's at that time. now it's up 32% and people do love it. would you say american express today, one of the downers that dom just mentioned, john, is that a vam area for you right now? financials and a stock like amex? >> well, i think financials are. am exis not had a name that we like at present. we prefer capital one financial if you want to be in say the credit card area, but we just added bank of america to our portfolio here a couple months ago, and so i do think there's opportunity in the financials. a name that i also like quite a bit right now is in the insurance space prudential. single digit pe and a dividend yield pushing 4% so there are still opportunities out there in a market that's trading not too high from the highs. >> joe, last word to you. where would you go hunting for value today? >> i think as we look at global equities we still tend to favor and a type of year we're expect, a positive year albeit choppy u.s. markets perform bert. as for which sectors, i want to be tilted towards those sectors which benefit from a conum balance sheet. think about technology stocks and those that have a debt towards a healthy consumer and you can't mention financials. you look at u.s. financials and to the extent that the federal reserve raises interest rates this year as we expect them to. i suspect you're going to find value out of those stocks. >> joe, thanks very much. we appreciate it. go to powerlunch.cnbc.com right now to see their strategies for the fed this year and that is powerlunch.cnbc.com. michelle? >> thanks, tyler. oil soaring trading above $41 a barrel today. on the rise, the striking kuwait cutting crude out of the supply chief and the chief oil analyst with the oil aspect and let's start with the commodity angle. story. what's driving the move higher today,cism police kuwaiti oil strike or is it more than that? >> kuwait is a big part of it. we're lost about half a million to a million barrels per day even thought the national company has deployed contingency plans, but you see the problem is unplanned outages are rising everything where. there was more in nigeria today. shell was forced to shut down one of their biggest oil fields. you're getting a lot more problems out of venezuela. generally speaking our estimates and planned outages are at a two-year high. >> what about the whole issue of demand? is it coming back at all, and where ultimately do you think the price is going? by the way, we have a guest here who thinks it's incredibly difficult to predict the price of oil, maybe a fool's game. tilman, go ahead try. >> i would agree with him on that. i think demand has actually slowed down. last year was a phenomenal year for demand. we had very strong growth in the u.s., europe, asia and this year had such an incredibly warm winter, a bit of a struggle to top last year. low prices are still encouraging drivers to go and drive and, yes, we're expecting good gas line demand season out of the u.s. and asia and overall growth is definitely going to be slower, burks again, this year i don't think we need demand growth to be as strong because it's starting to fall. the planned outages that i mentioned, two years of low prices, decline rates are really stepping up. >> all right. so maybe a little bit more supply/demand ball. thank you. tilman, you and a lot of businesses in houston. you're very busy in houston. what are you seeing there when it comes to the fall in the price of hill? >> well, you're seeing a lot of local companies that have been around for many, many years file bankruptcy right now and you're starting to see lots of layoffs, but that's what happens, but time takes care of itself and if oil set here at $40 to $45 for the next ten years, the technology and the way of american capitalism will find a way to make a profit at that price, and they have already realized from a fracking standpoint and drilling standpoint to start bringing the costs down, so we will adjust to whatever we have to adjust to, and that's just the way it is, just like when we had to adjust the $4.50 gasoline, we adjusted to it, and you're going to see us adjust now to whatever oil decides to look at. >> the do you have any oil investments or oil stock? >> i own a bunch of oil stocks but being from houston i'm not an oil guy. i'm a hospitality guy, but absolutely. when k myoand fcx dipped a few weeks ago when we were trading at crazy prices, $3, $4. i jumped in there, of course. >> oh, wow. >> let's get you some advice on your oil. which one is the best poised to make money. let's bring in christopher kelly, energy and utilities analyst with janus capital. good to have you here. what are you recommending to investors right now? when it comes to the oil stocks considering they have had a pretty incredible run. >> well, i don't disagree with your guest. i think at the end of the day, most of the focus and most of the opportunities that we see is long-term fundamental investors is in the united states, and two of the names that we really like are anadarko petroleum and enterprise partners and they are two different companies and like them for two different companies and they are good and long two or three-year holdings as the u.s. proves itself as the swing supplier through the end of the decade. >> you think it will be two to three years before you make any money there. is that why? >> i don't think so. air price products, for example, they pay you a 6% dividend yield today and they grow that mid-single digits, and even if it did take two to three years, could you still make 6% on enterprise products, but our view is that the view of the u.s. being a swing supplier actually comes into focus near the end of this year and oil prices probably go a little bit higher from here and then quite a bit higher into 2017 and 2018. >> okay. >> i've been a holder of enterprise for 15 years, and also i own anadarko. both of them are such well managed companies. i totally agree that i don't even think you'll have to wait three years to make money on these two from where you buy them now, but you definitely pick two winners because there's no better management teams than those two. >> thank you. >> okay. >> great. >> all right. chris, thanks so much for joining us. chris kell and thanks for weighing in on that. >> we're going to talk a little bit more about houston here. has the fall-off in prices in oil prices, has it affected your average ticket in your stores sns. >> definitely. >> and when you're really seeing is the meetings and even right now with otc. otc is going to be a disaster this year for the hotels and restaurants compared to what it has been. >> yeah. >> so you're just not getting the business. people are not meeting there. the check average is going down and they are eating at your different restaurants, not your high-ticket restaurants. >> right. >> some incredible pictures out of houston and that whole area in the past 24 hours of massive flooding. what are you hearing about what's going on there? obviously this is a -- a terrible tragedy for people who are losing their homes and businesses and obviously the floodwaters will eventually recede, and people will rebuild. >> last night when i left houston around 6:00, it was -- >> you were there yesterday, wow. >> i was there around 6:00 and it was a ghost town. as a matter of fact, that's a picture took from my helicopter right there flying to the airport to show what a ghost town it was. that's during traffic time. >> look at that. >> nobody on the roads. >> there is nobody on the road. but just basically every freeway was shut down, and this just happens, but you've got to remember. houston, texas, sits basically on a big swamp with all the b bayous and no that's right what flood control has done in the last 20 years, this just continues to happen. i had 28 feet of water from the bayou to my backyard yesterday. >> wow. >> so actually -- in yard it went up 17 feet, you know, off of the bayou in houston, texas. >> did you take the helicopter because of the flooding, or you just take the helicopter? >> i just take the helicopter. >> and we're not going to apologize for that, right? >> no, we're not. >> we're going to celebrate that. >> aspirational. i want to take a helicopter to work. >> tilman, thank you. >> here's what's on the menu for the rest of this hour. we've got several real estate experts who are predicting a big slowdown coming for new york city but why? a reason you might not have expected and which presidential candidate is best for small business. two small business owners will weigh in and an entrepreneur who wants to make money mining the moon, yes. that and much more coming up on "power lunch." it's time to prove ourselves as men! and as fans of awesome tv! but it is going to take a total team effort to get through all these shows! now are you with me? three, two, one... watchathon! big is back. xfinity watchathon week now until april 24. the greatest collection of shows free with xfinity on demand. new bank regulations and tighter access to kretd it could be choking manhattan's real estate development. he's president of the real estate development firm in this city. he joins us now and also with us the cnbc's diana olick and tilman fertitta. good to have you here. so something bad is coming. is it a slowdown, a correction? what's happening in new york city in real estate? >> sure. >> so i think you need to look at the investment sales market specifically related to development sites and we've had an upward trajectory for three years in a row. if you look at 2014, sales quarter one for development sites just in manhattan alone were 876 million n.quarter one, it jumped to 190 million pand in quarter 1 2006, 162 million, an 80% drop year over year so we've absolutely hit a wall because of a myriad of reasons. >> such as sns. >> new banking regulations. with the basel three regulations coming out, saying we want to put the brakes on. we think there's certain mechanisms that need to be in place for new construction loans. one, we want all banks to have more reserves in place in case of a downturn. >> on construction loans. >> on construction loans specifically. >> secondly, we want all developments projects to have 15% fresh equity into the deal, and this kind of segues into the fact that banks are no longer giving developers a stuck basis. if you've been signature on it and assembling and put together a huge site, the bank is only going to give you credit foormt you paid for the land and not a stepped up version where the land is worth 3x, and now you'll have to put more equity into the deal and that's changing the economics of development. >> you're not surprised by that. >> not at all. i'm building a huge project in houston right now, and it was -- i chose to fund it outside of a true construction loan because of all the regulation. it's nearly impossible, and the other reason you're going to hit the wall is they are truly making people qualify for loans now when you make a residential mortgage today, where when we had this happen you didn't have to, but they almost need to loosen it up now. it's typical america that we go from no restraints to too many restraints, and we always go from one extreme to the other on everything, and it needs to be loosened up. >> do you knowia is always telling us that. >> but one thing i've got to the say. look, i don't disagree with you about the lending situation, but aren't we missing the very obvious here point of supply and demand? new york city has seen an incredible amount of overbuilding on its new supply, its new condominium stock and that was supposed to be because there were so many foreign buyers in the market. a lot of that foreign interest has pulled back over the last year, the same thing that we're seeing in miami beach which we've reported on extensively. you're seeing a huge glut of condominiums on the market and there's simply not enough to meet that demand. you just can't keep building thinking if they build it they will come. >> so much coming on. >> i totally agree and we were going to get to that. number one is supply and demand, and there is so much supply. i have a place in sojo and what i've watched go up around me in the last four years. >> crazy. >> blows me away. >> yeah. >> and -- and -- >> and there's more coming. >> yeah. >> it doesn't stop. i don't know who is buying it. >> in 2015 there was a record number of construction permits pulled. it's 12,613 permits pulled. >> but part that have was because of that tax abatement. we saw the numbers shoot up when people were trying to get in before a tax abatement that expired last summer is and we saw the new construction for multi-fall list shoot up because investors wanted to get in ahead of that but that's don't necessarily become apartments or condos because, again, the demand just isn't there. >> i think that there is a tremendous amount of demand for that sweet spot in the $1 million to $5 million range. i understand everybody likes to talk about the big apartments, the fancy apartments, the $5 million to $10 million. that's 2% of the market. are i think you need to look at the $1 million to $5 million apartments. i know that's called affordable luxury in manhattan, but those apartments are still on fire. those apartments from when they are listed to when they have gone under contract has been within 60 days. >> always chuckle when we talk about the low-end apartments in new york city being between $1 million and $5 million. >> i could, too. >> amazing. >> a starter home. >> starter home, yeah, one bedroom on the river. diana, thanks so much for joining us. appreciate it. >> one bedroom on an air shst. >> tilman, is sticking around for the rest of the show. >> the dow managed to rally beyond 18,000, buttine yekm a huge drag on the back of its earnings, down 6%. we'll discuss that more. "power lunch" is back in two minutes. medicare options until you're sixty-five, but now is a good time to get the ball rolling. keep in mind, medicare only covers about eighty percent of part b medical costs. the rest is up to you. that's where aarp medicare supplement insurance plans insured by unitedhealthcare insurance company come in. like all standardized medicare supplement insurance plans, they could help pay some of what medicare doesn't, saving you in out-of-pocket medical costs. you've learned that taking informed steps along the way really makes a difference later. that's what it means to go long™. call now and request this free decision guide. it's full of information on medicare and the range of aarp medicare supplement plans to choose from based on your needs and budget. all plans like these let you choose any doctor or hospital that accepts medicare patients, and there are no network restrictions. unitedhealthcare insurance company has over thirty years experience and the commitment to roll along with you, keeping you on course. so call now and discover how an aarp medicare supplement plan could go long™ for you. these are the only medicare supplement insurance plans endorsed by aarp, an organization serving the needs of people 50 and over for generations. plus, nine out of ten plan members surveyed say they would recommend their plan to a friend. remember, medicare doesn't cover everything. the rest is up to you. call now, request your free decision guide and start gathering the information you need to help you keep rolling with confidence. go long™. ♪ as long as you love me, it's alright bend me shape me, any way you want me... shape the best sleep of your life. sleep number beds with sleepiq technology adjust any way you want it. the bed that moves you. only at a sleep number store. you may not have known, but there is a market for high-end custom made candy. kate rogers has the story of a woman who is making it. kate? >> reporter: hi, tyler, well, definitely not your average candy, a lock into the avant garde world of sweet saba. entrepreneurial mayion's candy is fine art with a wink and a nod. >> looks good. >> reporter: creator of sweet saba has taken a high brow approach to candy making with her luxury line includes crystals, mixed tapes and sunglasses. >> do you find it relaxing or therapeutic and sit here and paint. >> reporter: she emigrated to canada from israel as a child and started experimenting in the kitchen at a young age. >> what i'm really fascinated by is the transformation of material so baking was exciting to me as a kid because it was the fantasy of it turning into something else. >> reporter: that fascination with fantasy first helped jump start her fashion career including a lingerie line including the lake and stars which if you look closely has parallels to sweet saba, offering customers something unexpected, but as her business grew she fell farther and farther away from the end product and then came the candy. >> i wanted to get back to my roots of making art, and i didn't have an art studio at the time and i started making small sculptures in my kitchen where i could make a mess. people started making orders, and it grew into more and more orders where i started to look at the numbers and look at the opportunity and realized that it was a business. >> reporter: from there it was full speed ahead with her being drawn to the idea of creating a product from scratch again. >> the dream is to maintain the halo, maintain as much of this part as you can because it becomes more and more business as you grow. >> reporter: today she has made candy for "w" magazine's golden globes party, fashion labels and a favorite designer of singer reiana and there's other unconventional clients. >> i got a call from worldwide wrestling. >> reporter: really. what do they want? >> want mow to make them a big candy belt. you never know who is going to call and that's really what is fun about it it touches so many different kinds of people in so many ways. >> reporter: for this candy-maker the customer response is a sweet payoff. >> with candy it's something very accessible so something anyone of any age, demographic or any culture can appreciate it and understand it because everywhere in the world they have sugar. >> reporter: sweet saba customers can expect to pay anywhere from $5 to $7,000 for the custom orders. >> that's fantastic. beautiful stuff. >> show makes these huge crystals and says she can charge up to $5,000 for them depending on who orders them and how big they want them. >> and sweet. >> and taste great. >> thanks. for more on this story and all the cnbc make it stories go to cnbc.com/make t. crude surge and an oil strike in kuwait overshadow iin what's going on in doh ha. i'm sue herera. here is your cnbc news update at this hour. a federal appeals court has overturned a policy barring a transgender student from use the boys' restroom at his virginia high school saying it's discriminatory. that ruling establishes a legal precedent in the five states in its district, including north carolina. rescue efforts continuing across the houston area as floodwaters continue to rise. officials say at least 1,000 people have been rescued from apartment complexes and more than 1,000 homes have been flooded. >> senior officials from the u.s., japan and south korea strongly warning nk against making any further provocations that could lead to more encounter measures from the international community. this comes as a news conference in seoul following trilateral talks on the issue of north korea's nuclear capabilities. prince harry and prince william touring the "star wars" set just outside of london. they were shown the production process from some of the most iconic props, costumes and all those creatures used in the new "star wars" features. you could say they were fulfilling "star wars" fans' dreams. that is the cnbc news update this hour. pretty cool, michelle. back for you. >> thank you, sue. >> the oil market is closing for the day. jackie deangelis is at the nye "x" with the final trade. >> good afternoon to you, michelle. looks like we'll close around $41 a barrel on crude oil. got a little bit of a pop after a selloff yesterday. three big reasons for this. people are still concerned about the kuwaiti oil workers strike though the government of kuwait has said it thinks it can put this under control and contain it and get production ramping up in the next few days. definitely something to watch and a dollar index trading around 14 and most people are expecting the dollar to remain weak. in the only boosted crude oil today and all of the commodities oil complex and also short covering here. people are getting a little nervous in this trade and new buyers coming in as well and expect this range to be very tight. today's intraday high was $43.50. back for you. >> jackie, thank you very much. the small cap russell 2000 has been lagging the s&p 500 this year but our small cap stocks set for a big comeback. let's ask the trading nation team. the editor of "crossing wall street" and todd gordon is a technical analyst with tradinganalysis.com. eddie, would you buy into the russell right here? >> yes, i would. you know, the small caps have really lagged and sat out so much of this rally and something big just happened yesterday is the russell 2000 closed above its 200-day moving average. this is the first time it's done that in over eight months. historically that's a very good sign for small caps. you know, the s&p 500 is still about -- it's within shouting distance of its all-time high, about 2%. the small caps are still in correction territory, so for 12% off its all-time high. i think now that the market is become more friendly to these riskier names, i think the small caps have some room to run. >> all right, todd, what do you see the charts saying? >> i see a 200-day moving average sloping down which means we still have a downtrend and specifically if you were to reduce technicals we're below a trend line so resistance still seems to be intact. i would take exception to eddie's points here that we have the largest sector representing the russell financials. i think they will continue to underperform and going down the list number two and we have the technology which recently has shown some weakness and then health care i think has run its course so the top three sectors i think are in a little bit of trouble and small caps have underperformed and markets seem to be rolling over a little bit. i like to be short. >> you get the final word that you can respond to him. >> i would also say that the small caption are -- they are heavily skewed towards a lot of u.s. domestic manufacturers so i think a lot of the recent underperformance, can you see that mirrored in the recent ism numbers, but those have also improved recently, so i think if we see that try and continue, i think that could be very good for the small cap sector. >> gentlemen, thank you very much, "trading nation," for more on it head to tradingnation.cnbc.com. after 15 years of exile argentina is back into the international bond market and if you are looking for yield you might find it here. soma moldy has that story. seema? >> argentina returning to the global financial market in a dramatic fashion with a first set offerings since 2001 when it defaulted on its obligations and the default was followed by a protracted legal wattle including hedge fund manager paul elliott that was recently involved. the mega bond sale, totalled $64 president 5 billion, much higher than the $10 billion or $15 billion that argentina set out to sell. proceeds of this bond sale will be used to pay back previous bondholders and also to restructure its economy. the return on the ten-year is now fixed at 7.5%, rough lit same rate as india's ten-year bond and well below brazil's 12% return. once it starts trading this afternoon aberdeen asset management says the rates could fall even lower. now the overwhelming demand for argentina's debt is seen as a big win for president mccree who made ending argentina's feud with the creditors the main priority since taking office in september. he's been seen as a positive for argentina, it market and strong demand for the bond and a the stock market has been outperforming, up about 17% this year. tyler? >> seema, thanks very much. seema mody. which presidential candidate would be better for small businesses? we've got two business owners who have different views here to debate is next hon "power lunch." if you're trying to decide between a market order and limit order market orders may be appropriate on stocks that trade volume and as the tight spreads and for stocks with wider bid ask spreads or trade lower volumes may consider a limit order instead. this is the chair version of boast our pieces. >> this might be the most comfortable of them all, if you want to know the truth. you know what i would do if i were you? i would come up with a piece that's more of a sectional. i kind of think your furniture is a little how do you make the seating area work, but if you came up with a sectional, then you could make it four pieces or six pieces or ten pieces if you wanted and then a guy like me can seat more people. >> this piece was designed with exactly that in mind. it can be purchased and built separately and your contractor build it into two or tlooef different sections, your architect or design worry take care of those details. >> and i would want you to do it and if i wanted to add another piece that would be real quick for you to do. >> that's more of a commercial thick. >> i don't think you answered my question. you don't sound too sure. >> he's tough, huh? >> a clip of tonight's all new episode of "billion dollar buyer" on cnbc, 10:00 p.m. tilman fertitta back on set. you're tough on him. >> amazing small business, gosh, i hope i wasn't like that as a small business, just how hard headed everybody is and you're trying to give them business and they are saying they don't want to do it that way. >> they think they know better. >> part of the whole millennial thing and i love millennials. >> this is really an interesting episode because i did everything i could and mayini did business with them and maybe i did some furniture. >> we have to watch and see tonight. >> right. >> you run restaurant businesses. talk to us about the minimum wage. you brought it up with us a couple of times and this move across the country to raise the minimum wage to $15, even more waiters, which get a much lower minimum wage because they got tips. >> it's just so typical that politicians are politicians and they have never run a business and they don't understand tip credit. they just say oh, everybody should make the same. a dishwasher in the back making $15 an hour, i do not have a problem with that, but i have a problem when i have a waiter making $400, $2 hundred a night working at one of my fine dining restaurants in tips and they get to make the same as the dishwasher. you used to always have a federal tip credit and all these states and cities now are making their own rules and laws and taking that away so, therefore, we're having to find a way to operate with less people. >> do you have a fundamental problem as larry mentioned a moment ago, and i have thought about this a lot, there being a federal or a statement minimum wage to begin with? i mean, what business is it of government to come in and say that if i want to work for you for $4 ant hour, and that's fine by me, the employ, and you're willing to pay me $4 an hour, why shouldn't i be able to do that? >> i'm going to go against what you're saying. >> okay. >> and i don't think you need unions today, that there are bad people out there in business who would take advantage of somebody who really needs a job, who maybe didn't look right or was that smart and they would take a job for any amount and you would pay them $1, $2 an hour, so it's all right with me to have a federal minimum wage, but it need to be at a reasonable number. >> but then everybody comes back and says but that's not a living wage. >> i know, but that's just your police, if you're a stunt and you're a part-time worker, how can you have the same minimum wage and you're a 35-year-old trying to support a family. >> right, you should have a training wage and a student wage where if you're working eight or ten hours a week part-time, and then you can have a living wage, but it still shouldn't be $15 an hour because we're looking for ways to cut labor out right now because of these states and cities that are -- >> coming in and raising the wage. >> to $15 an hour. >> it hurts labor, it hurts. >> every july right now, because they areration it $1 a year, in my california properties it's costing me an additional $3 million every july 1st when it rolls in. >> you look at your payroll and say i have to make that up somewhere. >> you've got to look at your menu and say we've got to find items that eliminate prep and eliminate positions. it's a shame, but we're looking for ways to cut labor and employees which raises your unemployment. >> yeah. >> be sure to catch tilman tonight, a new episode of "billion dollar buyer" 10:00 p.m. eastern time on cnbc. >> which presidential candidate would be better for small business? >> two business owners with differing views. we'll debate that. one supports trump and the other supports clinton. we'll hash it out on the other side on "power lunch." i've been called a lot of things. i have read all of your books. did you learn anything? i learned that humans are complicated. we're emotional. absent-minded. and we make some really bad decisions. my trade-off analytics can help companies make better decisions, but i am still learning what makes people tick. what makes you tick watson? natural language processing, reasoning algorithms, statistical parsing. now you are just showing off. you guys have tried consistently throughout the administration to tax what they call carried interest as ordinary income. big wall street guy when you started doing that steve schwartzman said the obama administration is like hitler invading poland. how do you react to criticism like that, and i would note you guys haven't been able to get it done. >> i would say it's like us liberatiing deaths camps. the truth of the matter is there's no justification for a hedge fund paying at 15% to 17%. just no justification. >> that's a bit outrageous. vice president joe biden with our john harwood sounding off on the tax loophole for hedge funds, the so-called carried interest. see more of this big interview on cnbc.com/speakeasy. >> and sticking with politics, voters in new york, of course, heading to the polls today. big presidential primary across the river. we talked a lot about the relationship between the remaining candidates and big business. wall street maybe most especi especially, but which candidate does independent business want in the white house? small businesses? let's bring in have a ryan gandhi, founder and ceo of gmm non-stick coatings, a hong kong-headquartered supplier to brands like kitchenaid, george foreman and farberware and thinks hillary clinton would be best for business and joined by joe dutra, president kimmy candy company, a reno-based candy manufacturer and thinks trump is the best business candidate. let me start with you, ravi, why do you think hillary clinton would be better for business than a business man? >> i'll give you another business man. warren businessmen, one. greatest of all time, said what we need for 2016 is to make america work again for anyone who is willing to work and that means strengthening the middle class. if you look at business, every day 40 million americans across the country use my project. i'm very concerned about the middle class and look at secretary clinton's policies on mr. trump on things like immigration, on health care and tax cuts for small business i think she's absolutely a much better choice than mr. trump if he gets the nomination? >> joe? >> your response? >> i believe that the response for me would be that, you know, trump or people that are pro business, more fiscal conservatives, you know, we're looking at small businesses that are based in the united states where i have to pay taxes with regards to my employees and -- and i'm -- i'm stifled with regulations and stuff. i'm looking for someone that makes government a lot easier. i'm looking for someone that has the ability to lower taxes, not raise taxes, and i think, you know, i agree with ravin, we need to get people working in the united states, and i believe that a businessman or somebody with more conservative fiscal responsibilities is better for that job. >> ravin, tell me again, what is your number one reason you think that's better to have a democrat in office? >> well, you know, you're framing it politically, but i am pretty passionate about the fact that mr. trump uniquely is not positioned to be the leader of the free world, and let me tell you why. first of all, 40% of all the companies in the fortune 500 were either started by an immigrant or the son of an immigrant or the child of an immigrant. i am the child of an immigrant, and mr. trump wants to end immigration as we know it. >> r rah vin, you're being a politician on me. >> okay. >> that's not -- i didn't ask you why trump shouldn't why tru asked you why hillary should be. you are not running for office, are you? >> i certainly am not running for office. >> i asked you a question about hillary not about trump, please, sir. >> okay. well, i will tell you there are certain aspects of secretary clinton's policies that i disagree with, but i certainly think that from an immigration perspective, from a healthcare perspective and from an economic perspective secretary clinton's policies will be far better for the gigantic middle class in this country than mr. trump's would, mr. trump would be a disaster for trade. he wants to start a trade war between china and next co. >> it sounds like it's an anti-trump vote and not necessarily a pro clinton vote. >> look, i am a realist right now and i have to focus on who is going to be best for this country between those two. i know that secretary clinton and mr. trump have very high negatives. i voted for democrats and i voted for republicans in the past. i am an independent. but in the end mr. trump is such a free wheeler, he is talking about starting a new -- >> so hillary is less bad is the way it sounds right now. >> well, look, i mean, i am going to vote for secretary clinton over mr. trump, okay, and i think a lot of americans feel that way and if mr. trump loses in historic fashion in november as i hope he does i think it it's going to prompt a sole searching in the gop. i love the gop but why the standard there if their party is such an extremist who is turning off so many americans with these radical statements. >> joe, let's see if you can make a better case for trump than he did for hillary. because he really is against trump and not for hillary. so can you tell us why trump really should be the next president of the united states? >> well, this is not an endorsement, this is just a philosophical way i think. i think that, you know, we need to have less taxes, we need to have stuff like the death tax repealed and this is what trump is talking about. he's talking about a simplified tax code that reduces the amount of -- of levels in our tax system. you know, i look at somebody that, you know, immigration is a big issue, we are not going to solve immigration overnight, but i think people should come into the country legally. i also believe that we need to create more jobs and the way we create more jobs is we give small businesses like mine and people that are startups, we give them the tools to allow them to get around having so many regulations that stifle small businesses. now, ravine is doing business in china, it's a little harder to do business here in the u.s. >> well, folks, we have -- >> actually, i'm sorry, ravine, we're out of time. i bop for interrupting. we will continue this conversation i'm sure. i'd like to have you both back and talk more about it. appreciate it, guys. >> thank you, gentlemen. >> is there money on the moon? our next guest says yes, he will explain next on "power lunch." real is touching a ray. amazing is moving like one. real is making new friends. amazing is getting this close. real is an animal rescue. amazing is over twenty-seven thousand of them. there is only one place where real and amazing live. seaworld. real. amazing the first stock index ♪ (musiwas createdoughout) over 100 years ago as a benchmark for average. yet many people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? it's time to bench the benchmarks. you ppremium like clockwork. month after month. year after year. then one night, you hydroplane into a ditch. yeah... surprise... your insurance company tells you to pay up again. why pay for insurance if you have to pay even more for using it? if you have liberty mutual deductible fund™, you could pay no deductible at all. sign up to immediately lower your deductible by $100. and keep lowering it $100 annually, until it's gone. then continue to earn that $100 every year. there's no limit to how much you can earn and this savings applies to every vehicle on your policy. call to learn more. switch to liberty mutual and you could save up to $509. call liberty mutual for a free quote today at see car insurance in a whole new light. liberty mutual insurance. welcome back to "power lunch" i'm melissa lee. live in miami beach, florida. i'm joined by the chairman and founder of moon express, navine james, moon express is a moon mining company. welcome to the show. >> thank you. >> what are you mining on the moon and what do you do with it once you mine it? >> you think about it the moon is really a sister planet of ours so everything that we mine on earth actually is in abundance in the moon and there are elements like helium c that is very rare on earth but it's in plentiful abundance on the moon. when you look at the rare earth elements, they're rare earth elements they are not rare moon elements. if you can bring a small quantity of helium that can power the planet earth for generations to come and it is a clean energy. >> when you go to the moon and mine something it's yours. >> yes. so president obama signed a law a couple of months ago that essentially says that any resource that you bring back from the moon or asteroids or any planetary body you get to own it. so in some sense it's really a landownership that once you do something that land belongs to you. >> right. now, you've already raised $30 million so a lot of invervestor think this is not a moon shot, the moon express can actually do this. i have to ask you about this, a judge found you guilty of insider training -- >> never. it has never happened. >> never. >> it absolutely untrue statement. >> it's never happened. >> absolutely never happened. >> can you tell us a little bit of what happened? >> of course. i was the victim here. we had set up a trust for our children and a broker actually put our trust in an account and three months later put it back into our account and then the judge said the shares were transferred internally, that we had a buy and a sell. the sec ruled saying that this never should be ever considered a buy or a sell. in the first time in the history that sec sided with a ceo and said this is completely untrue and the case was dropped. >> i had to ask you about that and get that out of the way. back to moon mining, though, once you mine these materials do you have contracts already? do you have an indication that there is demand for these elements here on earth for commercial use? >> think about it, platinum grade materials and real earth elements and the helium. as an entrepreneur you always have to go where the buck is going to be not where the buck is. there is no energy that can be manufactured on earth, but in ten years there's going to be fusion energy requirement and that's when we have the helium coming back. it's like there's hell yum -- we've got helium. >> you had a question? >> navine, i have to give you credit. this is good stuff. if you've raised $30 million you are the new barnum and bailey. talk to me about this. you're saying you are going to try to do this in 2017? >> that is correct, paul. so we have actually currently planning to land on the moon in 2017, the second half of 2017, and start to bring back the resources and that will be a platinum grade material helium and the elements, more than that we have plenty of water on the moon. the water really is the fuel for today's system. so now you can start -- if we ever want to go to mars why would you want to carry all the fuel from earth because you fuel yourself on the moon. >> you're losing me. >> all right. navine -- >> that's not the first heard i have heard of water on the moon. >> if all this stuff can exist on the moon you can use that as a weigh station. thanks for joining us. guys, back to you. >> all right. fly me to the moon. thank you so much for being with us. >> it was great. >> new episode of billion dollar buyer tonight at 10:00, looks very interesting. 10:00 eastern and pacific here on cnbc. closing bell starts right now. the closing bell -- no. no. this is live with kelly and michael because we understand the name is now up for grabs today, mike. >> you've got to move fast on that one. >> i'm kelly evans at the new york stock exchanges with mike santoli. >> i'm mike santoli in for bill griffeth. while everyone is watching shares of netflix declined today, another mad i can't name is sinking, viacom's slide coming up. >> target raising it's minimum wage to 10 bucks an hour. we will break down the impact of the wage debate. >> plus the car of

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