Transcripts For CNBC Power Lunch 20161027

Stocks holding on the break even line on this busiest earnings day of the season s p and nasdaq lower. The Real Movement is happen ng the treasury market. Were seeing the yields and tenyears reach the highest levels since may. Biggest ipo thrks one. A transport company out of china. The stock is down 8. 5 . Welcome, efrk. Herself what else is happening at this hour. Twitter much in the news announcing it will discontinue its vine mobile app. Congress will hold a hearing next month looking into mylans big epipen settlement with the Justice Department and amtrak will now pay 265 million in settlements following the may 2015 Train Derailment in philadelphia that killed eight and injured hundreds. About 11 days to go until the election. Donald trump expected to take the stage shortly at the Champion Expo Center in springfield, ohio. It is the first of three planned events for trump in the state of ohio today. A state he probably almost certainly has to win. With the election front and center, lets get to Steve Liesman with the results of the cnbc all America Economic survey. Hey, tyler, thanks very much. Want to make clear people understand the name is all america because we poll 850,000 americans. And i want to start in a weird place, here on the undecided, the unsure, the neithers. Thats 17 . But thats fallen eight and the story of our poll which is the change from our june poll, is all in whats happened to the undecid undecide undecideds. Donald trump with 37 . Picked up two points here and Hillary Clinton, 46 , she picked up six, so the undecideds broke more in favor of Hillary Clinton than donald trump. Its why among registered voters with a 3. 5 margin of error, plus or minus, Hillary Clinton leads by nine points in the twoway race. Now, here we go. We asked people should the candidate accept the results of the election . 91 of clinton voters say Hillary Clinton if she loses, should accept the results. That number is 64 for trump voters who say if trump lose, he should accept the results. And you can see here, those who say they should not accept it. So thats kind of remember those numbers because check out the next screen, folks. When we ask will you personally accept the result, those numbers go down. 26 . Laughter over 26 of clinton voters say they will not accept a Trump Victory and 25 of truch voters say the same. So, if upg the story is sort of over after the election, folk, were going to have a lot to talk about as news people and as people in general. Now, i want to do this for larry kudlow, whos up there now. Larry, just put your seat belt on. I dont think youre going to like these results. This is the net change in clintons lead or deficit when it comes to the key issues on the economy. On the overall economy, she had led by one. Versus trump. Now, shes up by five. On trade, she was up nine, remains up nine. Business regulation. The key here is that we find donald trump losing his edge on things where he should be expected to be in front from his business background. Business regulation, shes up three now from a minus seven deficit. The budget deficit. Hes up by even on the stock market, with donald trump in june had a 16point lead over Hillary Clinton. Now, its a onepoint. Its not a big thing. Call it basically tied, larry and tyler. Thats whats happened when we look at how peoples views on the economy and which candidate is best in dichbt sectors. Important here to me, steve, is when was this survey in the field . September, sorry, october 21st through 24th. So, about a week ago. It would be friday to monday was our last day of polling. Friday to monday. Stay with us as we bring in lair kudlow. At times like this, the only philosopher worth quoting is yogi berra. It aint over till its over and in this case, it may not be over even when its over. Its interesting. I love yogi berra. Who doesnt. The race is narrowing the last three, four days. How much, i dont know. Real clear politics, shes about 5. 5 . Thats nationwide. She had gone as high as 7 . Stevie, what you told me this, wu bu i forgot. Democrats are plus six. Plus seven. Same as the fox news poll and less than the abc Washington Post poll. And we asked our republican pollster about this. We have a democrat pollster, he said thats his view of the way the nation is. That and he believes by the way, the democratic registration rising faster than republican. Hence why you waited. Thats the way he comes out. I was pleased to see. You waited based on 2012. Hes right. Within the realm. Hook, i accept all of this. The only point im going to make is as it happens often in the race, she pulled ahead, then it narrows. Can i back you up on that . What youre seeing, i see the overnights from all across the country because i got a lot of friends that are pollsters and im somewhat interest nd the subject. There is some narrowi ining goi on. But just the word some, thats all. The only other thing i would add to that, which may, may not have picked up, the obama care collapse what i call the obama care death spiral is having an impact because trump for once in his lifetime, is actually on message and hes done this two or three days in a row. Zpl i found steves numbers was thats big for him. Your numbers about business regulation, he cant lead in business regulation, which i thought was the one place he was able to define himself and clarify himself in more than one debate. Thats the lack of visibility to get his message out. Thats one of his messages. You have to be careful and im glad we had this opportunity to talk more about this. People may decide who they like, decide they like the candidate and the individual issue, but i want to back a up larry on this issue. Folk, if you could call up, the possibility of narrowing the polls. Our number of undecideds is lower than others. Just turns out that way. In that number, we look at the 17 who are undecided. We find 31 are republicans and 22 are democrats. So, the possibility that more republicans can come home the to roost so to speak and vote republican is there. If they decide to do so. And but larry, i want to show you another on these points. I dont buy the plus five for hillary on economy. Do you have another poll that says yoerwise . Hes plus five. He was plus more than five. Theres a margin of error for both, right . On tax, do we have taxes . I got taxes right here. We knew you were going to come. So, she is seen as more likely to ib increase taxes than trump. Theyre b about even on who is judged to be increase the deficit. 46 for trump 49 for clinton. Zbh zb he listened to certain informal advisers and hammered tax cut, growth. Kennedy, reagan. Tax u cuts, tax cuts, he would be in somewhat better shape. I want to show you a place where its not within the margin of error. This, to me, is critical. When you look at the issues of national security, okay, deal ing with foreign leaders, clinton leads trump 6129. Dealing with terrorism. Clinton leads 4736. Our pollsters never remember a time when the republican candidate did not have a commanding double digit lead on Critical National security. By the way, im going to use your fox poll which just came out. Foreign policy. Hillary, 55. Trump, 46. Thats a big number. Thats unbelievable. Heres an interesting number. Immigration, can i do this . Yeah, got to get to john h harwood. Immigration, hillary, 50. Trump, 47. America is not buying trumps immigration policy. Now, listen to this. This side the immigration number, when you ask would you rather have deportation or would you rather have a legalized process, by about 75 to 20, legalized process wimpbs and more than that, arizona whos on that side in the race . Hillary. Yep. Socalled gang of eight is on the right side of that race. So, when you look at arizona, we talked about this on closing bell while ago. Arizona, new mexico, nevada, colorado used to be solid red states. The immigration thing is damaging the Republican Party and its rhetoric. Lets bring in cnbcs chief washington correspondent, onharwood. Youve listening. You want to weigh in here . Youve got other polls as well. Yes, first of all, on the issue that was discussed before about more democrats than republicans in their, in our poll, that is because more americans consider themselves democrats than consider themselves republicans. Its not about party registration. The its about selfidentification. Our poll and other good political polls do not wait to that number. Because it is a floating attitude. Some days, some people would some day consider themselves a republican and if they dont like whats going on in the Republican Party, they consider themselves independent. Thats why the number is that way and why democrats have the advantage as they have in every recent election except 2004 when george bush won a close race. That was the only time in recent history when as many people on election day consider themselves republican as democrat back to the issue of the race looks nationally. You were talkinging about the timing of our poll. What weve seen as this week has gone on is that some higher percentage of republicans have come home to donald trump. Expressed a willingness to vote. Thats why in the Washington Post abc poll which had a 1 12point advantage on monday, that is now down to six points because of some of those republicans are going home. At the same time, were seeing some of the outliar polls at the other end of the spectrum, the polls that were showing donald trump ahead, those have now started to show a slight Hillary Clinton lead. So, what were seeing is a convergence on both ends at some averages you see in these real clear politics. Take a look at a chart ive got. These are the polling average, from real clear and huffington times. Theyre around 4640. Thats why that is a fairly good picture of where the race actually is. Good campaigns dont rely on one poll, even their own. They average them. Then take a look at one key state. Pennsylvania. This is the state that donald trump absolutely positively has to win for his rust belt strategy to mobilize blue collar voters. That also has converged around 4640 in the three different polling organizations or aggregating organizations that i mentioned. So, the picture is pretty clear. Weve got Hillary Clinton with a race thats nationally at a spread of around six points. Plus or minus. One or two, here or there. The same is true in the most important battleground states. Got it. All right, great to have you all here. John harwood from washington, d. C. Steve liesman with our exclusive survey and larry kudlow, always a pleasure. Exclusive analysis. Back to yogi berra. That would be so much more enjoyable. Were going to go to sima for a news lert. A potential deal in the tech space. Century links shares spiking on a dow jones report that the Communications Company is in advanced talks to merge with Level Three Communications that again, according to dow jones, quoting sources, level three as this afternoon had a market cap of 16. 8 billion. Century link about 15 billion. You can see both shares of century link and level three are higher on this potential deal. Well keep you updated on this story. Thank you. We have a news alert here in the bond market now. Sevenyear notes up for auction. Rick santelli, whats going on with yields and spread . You know, yields are moving higher and maybe some of it could mean a recent span of good news, but this parade started long before that. Just seemed to be rising. Not gives the benefit of the doubt to the policies that have kept rates low. If we look at todays 28 billion of seven years, it was average in every possible way from top to bottom. 2. 49, spot on action average. 61. 5 for indirect, 13. 2, one tenth more than a ten auction average. The yield the way, 1. 653. I saw 165. 5, everything about it. Middle of the road and that might be as good as it gets these days. Why would want to jump in the action. See what the secondary market may look like next week. That seems to be what traders are talking about. Back to you. Thank you very much. Biggest chip deal in history. Been talking ate for some time now. Qualcomm to buy, what does it mean for the industry . Economy, that is straight ahead. Now that fedex has helped us simplify our ecommerce, we could focus on bigger issues, like our passive aggressive environment. Were not passive aggressive. Hey, hey, hey, there are no bad suggestions here. No matter how lame they are. Well said, ann. Ive always admired how you just say whats in your head, without thinking. Very brave. Good point ted. Youre living proof that looks arent everything. Thank you. Welcome. So, fedex helped simplify our ecommerce business and this is not a passive aggressive environment. I just wanted to say, you guys are doing a great job. Whats that supposed to mean . Fedex. Helping Small Business simplify ecommerce. The es and es hybrid. Its your daily retreat. Get up to 5,000 customer cash on select 2016 models. See your lexus dealer. Its your tv, take it with you. With directv and at t, watch all your live channels, on your devices, datafree. Switch to directv and lock in your price for 2 years. Offers starting at 50 month. This is the new comfort food. And it starts with foster farms simply raised chicken. California grown with no antibiotics ever. Lets get comfortable with our food again. Weve looked at this a number of different ways. I think its a fair deal for both shareholders and both boards have looked at it and concluded the same. Together, we have an opportunity to realize that better and i think thats the reason for the combination. That was qualcomm ceo today talking ability his companys 38 billion acquisition. Its the biggest chip deal in history. Both stocks are trading higher. Lets bring in chris, the analyst with clsa. Great to have you with us. Thank you. For qualcomm, this is all about diversification. Too exposeded to the mobile phone sector. I think theres two parts. Certainly, diversification is a big factor. Gets them less exposure to mobile, more to other sectors, such as automotive. Also a big financial aspect, too, thats why weve seen so much m a in the space so far. Because you know, cash is cheap right now and Companies Like qualcomm have a lot of cash overseas they can use for activities such as this. Qualcomm and nxp, who suffers from this combination . I dont think theres anyone that suffers from it now. Nxp, because they were so broad and diversified, they compete wd a lot of different folks now. I dont really see much change to the competitive landscape. Of course, qualcomm wasnt participating, either. These areas where qualcomm was trying to get into it on their own and this gets them into it more quickly. Theres been 200 worth of deals in the chip space since 2015. Who do you think might be next what expertise is a likely target . Its easier to answer at this point about who wont be taken out rather than who will. I think most investors say somebody in the mid cap space will be a candidate with respect to the, i would point out that Texas Instruments has been probably the one Large Company that hasnt done a deal yet and as more thing lix this come on, perhaps tis got to take a look and say perhaps they need to participate. Who would be a likely fit with txm . Anybody, gwen, theres really too Many Companies to mention at once in terms of in the mid cap space. Really, i think where its probably most profound is in the mid cap space, where youve got a large number of companies that dont have as large a scale as qualcomm has. Such as alter ra, xilinx . Xilinx is one of the names that has been mentioned because their competitor was taken out by intels. The space obviously has had a huge run up in anticipation of m a. Up more than 20 . So, has it already been baked in at this point . Well, i think ma and, its hard to bake in m a because you dont know whats going to happen with any companies. I would say that if you take a look through this Semiconductor Space in general, certainly rell ty to the market, the valuations are not that unreasonable. Fundamental analysts, take a look at the group, too, and i like the fundamentals. Were starting to see conditions better underpinning demand, so, the way look at m a, thats a degree of optionalty for both sides. For the companies being required, but equal kovm, one of the reasons we were positive was the optionalty from the balance sheet. Certainly, the potential was there and was being recognized. Thank you. Well leave it there. Coming up next, computer discs, auto parts and one deal site disaster. The good, the bad and the ugly in todays trade. Next. Whats the value of capital . Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley eeeeohmumohweh hush my darling. dont fear my darling. the lion sleeps tonight. hush my darling. man snoring dont fear my darling. the lion sleeps tonight. woman snoring take the roar out of snore. Yet another innovation only at a sleep number store. Balance transferot to othats my game bank you never heard of, thats my name haa thank you. Uh, next. Watch me make your Interest Rate. Disappear. Theres gotta be a better way to find the right card. Whatever kind youre searching for, creditcards. Com lets you compare hundreds of cards to find the one thats right for you. Just search, compare, and apply at creditcards. Com. A one, a two, a three percent cash back welcome back to power lunch. Todays trade. First to the good, western digital, shares surging more than 7 after the company talked estimates. To the bad, o oreilly automotive, the shares falling after the company gave a disappointing outlook for the Fourth Quarter. Ugly day for groupon after the Company Reported another loss and announce iing the it is acquiring rival, living social, for an undisclosed amount. Investors not happy with that. Tosy ma with the market flash. Take a look at shares of Southwest Airlines on the move here on the announcement that the company is implementing a 5 fare increase across its domestic system. Unclear if other airlines will be matching this, again, a 5 increase and shares are higher on this news by around 2. 6 . Just around session highs and we should point out Southwest Airlines was down as much 8 yesterday on disappointing earnings. Thank you. Straight ahead, two big ceos sound off. Proctor and gambles david taylor in his first interview since becoming ceo and Bristol Myers squibb ceo. Power lunch is back in two minutes. The microsoft cloud helps us stay connected. The microsoft cloud offers infinite scalability. The microsoft cloud helps our customers get up and running, anywhere in the planet. Wherever theres a phone, youve got a bank, and we could never do that before. The cloud gave us a single platform to reach across our entire organization. It helps us communicate better. We use the microsoft clouds advanced analytics tools to track down cybercriminals. This cloud helps transform business. This is the microsoft cloud. Heres your cnbc news update. A judge is awarding victims from last years deadly amtrak accident 265 million. Eight people died and more than 200 were injured when a northeast regional train headed for new york jumped the tracks going 100 Miles Per Hour near philadelphia. U. S. Schools getting a mixed report card. The annual assessment of fourth, eighth andth graders found students are struggling to grasp critical subjects. One in five High School Seniors were proficient in science, however, children in younger grades showed improvements and girls also appeared to be closing the gender gap for achievement. Vladimir putin is calling claims that russia is meddling in the u. S. President ial race hysteria. He went on to say the allegations are being used by american politicians to distract voter frs the real issues. And whats scarier than terrorism or death . Apparently, that is. Clowns. A recent poll asked over 1500 people to name their greatest fear and 42 said clowns. Beating out all other fears, exfor one, corrupt government. Thats the cnbc news update this hour. Melissa, back to you. Tough time to be a clown. Sue, thank you. Youre welcome. Truth is stranger fiction. A check on the markets now. Close to the flat line, but as weve mentioned before, the real action is really happen ng the bond market. Were seeing a sell off seeing yelds on the ten year to their highest levels since may. The spread,. 96 . The highest level in months. Lets get to sima. As tra senne kai shares are off. The fda has halted trials of a cancer drug. This is one of the most important pipeline drugs. The news having a positive impact on Bristol Myers squibb. Were looking at shares again having a positive day. Melissa. Michelle, excuse me. Thank you very much. Big ceo interview today with a big earnings beat. Sarah eisen sitting down with proctor and gambles ceo. The headline is that p and g is a much smaller, more nimble and a agile xwaen as the ceo told us. He is one year into the job and prk ng has shed more than 100 brands to focus on 64 brands. Brand like pampers and bounty and gillette. Organic growth was the best in year, but overall, sales remain pretty flat thanks in part to some work p and g has to do with gaining back market share and the swren economic environment, so, i asked david taylor why u. S. Consumer spending remains so hello he would back and what he called flat growth. I think theres a lot of things. Concerns, uncertainty. The economy is growing, but not growing fast or slow. I think were in a relatively flat period of time right now and some stimulus, hopefully, will drive a little bit better growth, but right now, what im seeing and experienced in the ten categories is a relatively consistent and modest growth u. S. P and g is the worlds biggest advertiser. I asked about the transformation to digital and which sites and companies in particular were getting the most bang for their buck. Heres what he said. The area where weve got bigger investments would be google and facebook. If you look through the u. S. , it may be alibaba and varies in other countries. Its countries with enough inventory and interest to be able to communicate our key messages. Those two would be the ones im most familiar with. It was interesting he brought up ali b. Last year was tough in terms of the economic environment. This wreer, he said despite the headlines about the china showdown and what theyre seeing in the nielsen data, which tracks sales, the growth is happening online. Youre still seeing ten 10, 20, 30 growth in consumer spending. Its just moving online. So, guy, a lot of interesting comments there about the macro environment and the specific turn around he is trying to engineer chltd wou. Would say hes cautiously optimistic and innovation is a big theme. What are the brands they got rid of . Over the counter medicines and so forth . Remind me. They got rid of a lot of businesses. And a lot of different categori categories. A big one was beauty. The cover girl make up. They made a multibillion dollar transaction where they sold a lot of brands to codi. It had been a remarkable transformation from more than 200 brands down to 65 in just two years. And its the brands that are coming back like oral b, health care was a big beat in the last quarter and some of the big brands that are still struggling like olay, which they need to focus on, look at pricing and in some cases, with the case of olay, they stretched it a little too far. But it was really across the board. They looked at brands they said were not contributing to the core profit. Im told you had a special visitor visit during your live shot today. My mother. She very graciously brought us breakfast. Oh, you have the tape, good. She left already. Im in my hometown. Oh, weve got the tape. And also, apparently, earlier today, kaylas parents visited an Andrew Ross Sorkin live shot. There they are. Cnbc goes on the road. What is this . This is really something. Mom and dad. Photo bombing Andrew Ross Sorkin. All right. It proves that no matter what, youre still most proud when your mom and dad see you on television. Its true u. It was very cool for her to have an up close view of this, although not as glamorous as she thought it would be. Thats the secret. Yeah. Thanks. Watching the sausage being made. All right, shares of Bristol Myers up about 7 . The drug maker beating Third Quarter estimates. Lets get to meg for an interview with the ceo. Thank you so much. Thank you for joining us. Thank you, meg. So, the stocks up today. You guys have a lot of news, new 2017 guidance, new buyback and a potential streamlined operating model. Some despite the stocks move saying this looks like potential cautious times ahead. Are you doing this from a place of weakness or strength . Well, first of all, let me say we had a great quarter. The performance of our product was very strong across the board. Truong global performance, that grew into u. S. , grew internationally with with really good launches in europe. It was the sales across the world, even more mature brands like did well. Across the business, across every market, a really strong quarter. So, i feel really good about where we are as a company. I feel really good about where were going. And we made important announcements today that speak to the strength of our business and the confidence with which i look at 2017. And prospects of growth for the future. Going back to august, of course, that giant surprise with your lung cancer trial. I think mark showing from ever core calling it one of the biggest clinical surprises hes ever seen in his career. As you look at those results in lung cancer, do you feel it was a result of how you tested the drug . Is it really interchange bable mercks well, science is moving really rapidly. And were moving very fast. Weve actually established a foundational therapy in not only lung cancer and second line, but across multiple tumors. Weve learned from the study, unfortunately, now we know that therapy is not going to be an option for many patients in the first line, so it doesnt really change our strategy. We are committed to Combination Therapies and we are very confident, very well positioned with combinations. With the stocks reaction, do you think the market overreacted . I look at the future with confidence. We had great opportunities in the shortterm. When i look at the longterm, our plan is really exciting. We have really exciting potentially innovative medicines. Not only in onkole ji, heart failure, i immune know science, fibrosis, all those probleare m forward and the longterm prospects for the growth of the company are really good. As you say youre looking at a potential streamlined model, does that mean a Smaller Company . Will you will having job cuts . Narrowing your therapeutic areas of focus . Its about focusing our resources where we can make the most difference. As an industry and company, we have to change all the time. This is a very dynamic market. So, at Bristol Myers squib, we have a long history of changingened evolving ahead and today, we announced just another step. Its going to be all about focussing o resources on the highest priority. For example, today, we announced we are going to be increasing rnd investment in 2017 versus this year, so its all about the confidence we have in the future of the business. Youre doing this against a backdrop thats uncertain with the u. S. Election coming up and potential changes to the way drugs and prices are regulated. How will that impact your business if fs theres a change in november . Were following that closely, of course. We are an innovation based company. We invest in rnd, believe in innovative medicines. For u its important patients have access, so we work with external stake holders all the time. We are focused on the political environment. I think were well positioned because we have innovative medicines. Theyre dif rent. Im really confident about the promise of our portfolio in the pipeline. One thing folks have been wondering about with you guy, you have a lot of cash. Will that involve potential ma and . Weve believed in business to come. Wung of the strength of f the company has been to combine i see us continuing to do that. And Business Development in areas of great science that have big promise and if those areas, where our scientists are very knowledgeable. We can take programs and move them forward. Thats really our strategy. It does not change. Were just very optimistic about the future. Thank you so much for joining us. Thank you. Back to you guys. Thank you very much. That stock is up 6. 4 . In todays session. You look at the oneyear, she brought up the issue of what happened in october with the lung cancer data. On that drug. Never recovered. At least in results, we did see because he talked about using it not just as a monotherapy, but by itself. We saw the drug used in combination, those sales were up 19 , which shows that incombination, you have some success there. Exactly. The four stocks in focus today, your daily dose of street talk comes up next. Lets kick it off with buffalo wild wings. Prompts Credit Suisse to cut. Management actually addressed that on the Conference Call saying it is reviewing the call structure in the Company Versus franchise tore mix. Most active investors want a heavier mix towards franchising. The analyst is cutting 2016, 2017 and 18 estimates. Its got about a 10 short interest. That would make sense. Second stock is grub hub. Roth upgraded it to a buy. That would be an 18 increase from where it is now. The b analyst citing solid Third Quarter earnings. Held stronger growth platform stickyness and growth, ebitda per order. They say the weather, which is bad and the olympic, which were good, helped. Weather being bad meaning good for grub hub. Of course, you get delivery instead. But those poor delivery guys. I know. Third stock, alee gent airlines. The like the business model. Trends could buoy sentiment, but recovery is likely to take longer than expected and cause pressure to a single fleet type are likely to be greater. Stock number four. Hersheys. Citi upgraded the company to a buy expecting shares to rebound in 2017. Firm citing a cost savings program. Innovation and renewed top line growth as the reason. Initially, pointing out three new products. One called cookie layer crunch. Worth an upgrade . Exactly. Especially important as the key driver of chocolate category growth in years where sales reach at least 50 million. Price target on the stock was lowered to 110. Still though, its at 96, so thats up 15 . A little taste test. What do you think of cookie layer crunch . Anything that has layers of cookies is good by me. Thanks, guys. Still ahead, the part of the country where homes for sale are flying off the shelves. If you can find a house on a shelf, well tell you where, next. Big rally in springfield, ohio today, where donald trump is spending a lot of time. This one in springfield. I believe late e today, Hillary Clinton is campaigning with Michelle Obama in another local. As this race now focuses intensely on two states, ohio and florida. Lets get the diana olick in washington with the delates. Lets start at the top. Contract sign to buy homes in September Rose 1. 5 monthly. Up over 2 compare today a year ago. Sales were hottest in the west, even though thats where supply is the tyus. Realtors say the lack of homes for sale is keeping the market from bigger gains and more sales though are finally translating into a turn around in the Home Ownership ring, which fell to its lowest in 50 years but bounced back in q 3 to 56 pint 5 . Thats still low eer than last year and a lot lower than the peak of just over 69 . More interestingly, bigger gains in formation. Not just on the hen rene tall side ch more than a million new households were formed. When a person movers out on their own. Almost half were own ers. Finally, Mortgage Rates ticking up today as the yield on the tenyear treasury with rate loosely followed hit their highest in four months. We are still low, wu with home prices really heating up again, even a slight tick up in race is going hit affordability. Back to you. Thanks so much. Lets talk more about that with the new chairman of the Mortgage Bankers association. Good to have you here. Good afternoon. Start with the last thing first and the rise in ten h v year yield were seeing. We focus so much here on cnbc on the fed and when theyre going to raise rates, but i think a loft americans realize they focus on the short end of the curve. The overnight rate. Mortgage rates are set by the tenyear yield. This rise were seeing to above 1. 8 , does that worry you . Whats going to happen, the market is going to shift from refinance to purchase. We expect it will go to 1. 6 trillion. The biggest decline will be in the refinance, that will go down and be probably 1. 1 trillion in 2017. Why are you so convinced it would go up . Increasing Interest Rate would be gradual. We dont anticipate it would go to a point. It will decline. From 2016 to 2017, but the number of households are growing dramatically. In the piece you just heard that were in the middle of the largest increase in households in the united states. There will be 50. 9 million new households over the next ten years. 69 of those will be from diverse backgrounds. Are you seeing, are your memb members seeing a stall ahead of the elections . A decrease or stall in originations of either mortgages of refinancings . No, the election rs not really impacting our business. Were hope thag the new congress and administration will help us with clarity and regulations that will also have a positive impact on the markets. But the most important thing that we would want from a new congress and a new occupant in the white house would be clarity and regular laces and doipg something about the future of the secondary Mortgage Market. Reform. The government sponsored enterpri enterprise. In my long and disastrous career of selling house, ive never made money. But the paper work, much of it driven by regular laces. Theres a lot of stuff that attends the closing of the loan. If you could identify two or thr threelation, what would it be . One would be the fha program. Millennials entering the Mortgage Market. The fha program is one of the best loans for first time homeowners. The lack of clarity in that part of the Mortgage Market is keeping a lot of lenders from using a product that helps first time home buyers. Why is it unclear . What specifically is the impediment to clarity . Shifting the overside from hud to cf p pb had some issues. But lenders are afraid to not just buy back loans, but getting sued by the department of justice. Because of minor roer rories. Great to have you on. Thank you. Thank you very much. Still ahead, car, many would like to get their hands on. Well, we did. You did. I did. I did. I took it out for a little power lunch run. We are not done with this la lamborghini. More ahead. So what else is new . Hows your mother . Umm. Shes doing good. She needs more care though. She wants to stay in her house. I dont know even where to start with that. First, lets take a look at your Financial Plan and see what we can do. Ok, so weve got. Well listen. Well talk. Well plan. Baird. Welcome back. Here is what is on the menu. Im tyler mathisen, this hour, we have got make it a profit. But job cuts and slowing Revenue Growth at twirt. Is twitter turning around . Or dead in the water . Brutal new leaked emails adding fuel to the Clinton Foundation controversy. It all boils down to the phrase, pay to play. Were going to take you inside clinton inc and a major market warning signal. This hasnt happened in five years. Well tell you what it is, but youve got to stick around. The second hour is power which begins right now. Frightening before halloween. Stocks are mostly lower, but holding steady. Dows higher by 11. The s p is flat. Telecom and health care, the best performing s p sectors. Real estate, Consumer Discretionary lagging and telecom is in positive territory. Like i mentioned, tenyear yield is the big story today. Looking at a yield of 1. 85 . 1. 84 p now. Weve seen a climber. May explain why we see the reets getting hit. Lets take a look at the movers. Century link and level three soaring on reports of merger talks. Cheesecake factory and f5 networks rallying on earnings. Those stocks are up between 6 and 10 and not the starlet you want for the biggest ipo of the year. Zto express down almost 10 on its first day of trading. Thank you very much. Melissa, another mover today is twitter. The stock was up as much as 5 earlier, but now off those highs. Never the less, pretty good day for a stock thats really well, twirt hasnt been doing that well lately. Up 2 . Heres whats happening. Twitter making a surprise profit. Kind of. But Revenue Growth was weak even though there was growth. A big concern for investors. Its also cutting 9 of its workforce shutting down its vine mobile app. Could this be a beginning of a turn around at twitter . Lets bring in jason with oppenheimer. He has an underperformed rating on twitter and a 17 price target. Welcome. Good to have you was. T hard for me to make sense of that report. Yes, they had a profit. If you dont count the loss. You dont count the charge off items that actually created a cash loss there. Yes, they had beat Revenue Growth estimates. But Revenue Growth slowed yet again. Yes, they had more monthly active user, but only a couple. Is this a healthy report or a nonhealthy report . I mean, look, from a revenue standpoint, they hit the targets. They set for themselves as far as their guidance and the business from a mau standpoint in the u. S. Was stable. It didnt deaccelerate. The issue is that the montization slowed. Revenue was down 3 in the quarter versus being up 8 in the second quarter. You know, as far as the upside in the cash flow, it was margin. But then whats confusing when you look at the implied guidance in the Fourth Quarter even with this big head count reduction, the margins are going to be lower than expected in the Fourth Quarter. You spent less than you thought and now, youre spending more than in the Fourth Quarter, but youre letting these people go. I think theres a lot of questions right now from investors how to think about whats happening with extenzes. User growth is slowing. I think its a product issue. The bottom line is theres an enormous amount of o information on twitter. A lot of o of it is is good, but a lot is not good and trolling is a major issue. They dont deal with it well. And inn the issue is is. Say well have the segment here and cnbc will post it to twitter. And then 20 people could come and Say Something negative b about me. Now, if you were trying to use it from an investment perspective, i want to know news on twitter, the interview might be useful, but the comments after are not. Trolls are mean people. If theyre going to say anything negative, its going to be about me. Is it no wonder to you that all the alleged suitors walked away . When they ask for bids to be due in two weeks, that was a sign they wanted to do something. What you see is that they didnt wabt to announce this head count reduction. If you were able to sell the company, you could have anointsed it. 9 , the its messy, time consuming and if they were able to sell the company before then, they could avoid it so now, they cant they have to think about managing to a cash flow and earnings for share because ultimately, a Media Company is going to care about the cash flow impact, where as a Big Technology might say i dont care about the cash flow, i care about the technology and the platform and the user and so, i think because of wapd, they node to hedge their bet and say if we are not going to become an independent, if were going sell the company next year, we feel to make it more attractive to Media Companies and as a result, you want to try to have as high a number as possible. Thanks very much. Dont you dare troll jason. Hes a nice guy. Thanks. Tesla shares are rising today after the Company Posted a profit and beat earnings expeck tases. Phil has more. And michelle, if youre optimistic about tesla, there was a lot to like in this report. Yes, there was a lot tesla bears or cynics would not like, but lets focus on where the optimism is coming. First of all, lower cap spend ng the Third Quarter. Yes, just for the Third Quarter, but for the third, it was lower. They had a profit bable Third Quarter. I know some people are going to talk about the electric vehicle tax credits. Thats in there, but its still profitable and theres a possibility of a profitable Fourth Quarter and by the way, elon musk says they are not likely to look to face capital in the immediate future. Hardly if we did not gotten and raised a bunch of money, current plan says we dont need to raise any money. Get a lit scary in terms of how much capital relative to our sales volume. By the way as for the model three, elon musk says it is still on track for delivery in 2017. A delivery forecast, which the company says it expects to meet in the Fourth Quarter. Theyll bring at least 25,000 vehicles, which the plan, at least 80,000 vehicles for all of 2016. Share of tesla getting a bit of a pop today. Dispite the fact that there are more than a few cynics saying there are some things you can pick apart in this report. It was a profit none the less. It was and we should note that the stock has really off of its after hour session highs from yesterday. Here in terms of the zevs, the zero Emission Vehicle credits, does that make teslas operating cash flow look that much better because the it was a significant boost unlike any other quarter . Sure. It was 139 million. How does management say we should think about that Going Forward in is that a trajectory . Is that number going sunup. No, the expectation is that you will not see the electric vehicle credits. Were not going to get too deep in the weed here because it can get wonky, but it comes to this. If you sell electric vehicle, you can sell the credits. Sell them to other automakers. The pricing on these is all over the place. But that is one way that tesla helped its balance sheets. They sold 139 million worth of electric vehicle credits in the Third Quarter. More than people were expecting. The expectation in the Fourth Quarter, they dont give you guidance, is that we should not see that type of a credit in the Fourth Quarter as well. So, was he paying attention on the call . The sound bite you played from the call on a question he had know was coming sounded so disjointed and full of pauses. Michelle, join me on a call sometimes. Thats very typical. I will say he was a little more subdued from my perspective than he typically is on these earnings calls. Doesnt mean he was disinterested, but you will hear him take pauses during these Conference Calls. Thank you. Take a look at this chart here. Last week, we saw the largest mutual fnd outflow in over five years. Is this a warning sign for the markets . Joining us now, cofounder of the spoke Investment Group and paul, you took a look at how the s p has done in periods. What are we supposed to discern from this figure . So, when you look at the chart there, you see that its one of the largest outflow os this bull market. Only exceeded by the august 2011 outflow. Then you know, we have a chart showing where these outflows of 10 million more occurred within the s p 500. If you look at the chart here early on, these were generally bullish. The record more recently has been the jury is still out on it, so more negative reaction. So, i think all in all, the forecasting able aty of it is not the greatest here. For one, you have money going into etfs as well, but it doesnt make up for the amount of money coming out of mutual funds. Weve had 180 billion of o outflows. About 75 billion inflows of etfs, so theres another 100 billion. I think what the point of this was taking a step back, it correlates with the broader picture of the skepticism. Investors, theyre not bearish, but theyre far from konl com place enter. It looks like a fare oof missing out action call. Pull the money out and the stock market goes back in. You pull it out again and you get worried. I think when you talk to investors, the number one fear of investors is not you know, missing out on the next rally. Its being there, holding the bag for a decline. We do a survey where we ask investors how much risk theyre willing to take and the tracker for that this month hit the highest levels in the history of the survey two year, but even still, more investors are willing to take less risk than more. So, these are equity fund outflows, right . Yes. Domestic ek wii thety funds. So where is the money going and why is it leaving . Investor, theyre just going into bond funds. Youre continuing to see in flows into bonds and thats the outflow is nonstop in equities. The complete opposite on the fixed income side, so you still see investors flowing, piling into fixed income mutual funds. So, when i look back at the last time, one of the times you cite, august of 2011, we know what was going on in august of 2011. There was the debt crisis. The u. S. Debt crisis and the lock down in washington. Its e citi to see why people were scared then. What is freightening them now . What do we talk about every day in the Financial News . The election. Its the top story in the news over day. I think theres a lot of uncertainty and you have two sides. Who are very you know, divided and dug in. So, a lot of people arent going to be happy with the outcome and dont know whats going to happen come the election. We have both candidates who arent talking market friendly policies. Thank you. The new eest leaked emails creating more headaches for the Clinton Campaign and i got behind wheels of the newest lamborghini. Price tag, 200,000. Where did i drive it . To mcdonalds, of course. Ill show you more of the joyride i took with robert frank coming up and look at whats happening on the campaign trial. Hillary clinton is about to take the stage at a rally in win stom salem, north carolina. Donald trump speaking now in ohio. Power lunch will be right back. We love knowing whats happening. So the nest cam Security Camera looks after things and alerts your phone if somethings up. Hey, need a glass . No matter what it is. Hey, dad. Mary buys a little lamb. One of millions of orders on this companys servers. Accessible by thousands of suppliers and employees globally. But with Cyber Threats on the rise, marys data could be under attack. With the help of at t, and security 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. Keeping the power lines clear,my job to protect public safety, while also protecting the environment. The Natural World is a beautiful thing, the work that we do helps us protect it. Public education is definitely a big part of our job, to teach our customers about the best type of trees to plant around the power lines. We want to keep the power on for our customers. We want to keep our community safe. This is our community, this is where we live. We need to make sure that we have a beautiful place for our children to live. Together, were building a better california. More leaked emails showing a tangled web between the Clinton Foundation and private business interests, governments. One of the ones thats gets a will the of attention is a 2011 memo written by doug ban. And in the memo, intended for private con sunlgts only, he detailed all of the ways that bill clinton personally, the Clinton Foundation and a private entity called teneo run by doug band and other, all managed to profit from the same core group of donors and contributors. Both to the nonprofit side and for profit side. Were also learning of the really raw and bitter feud that took place between doug band and Chelsea Clinton as she arrive into t foundation in 2011 and fwan the take a more assertive leadership role. Take a look at some emails chelsea. She says at one point, doug called and yelled and screamed at my dad. I cannot believe doug did this on the day my grandmother died. In another email, she says that staffers have taken significant sums of money from my parents personally, expense, car, et cetera and others directly. Accusation of fraud or misuse of funds, then says that staffers have taken, staffer was caught loading the same spyware on his computer that he loaded on to another staffers computer, so an allegation of spying inside the Clinton Foundation as well. Now, take a a look at these from doug referring to Chelsea Clinton. He says at one point, this is the third time this week where she has gone to dad doi change a decision or interject herself in the process she says is so important. On another occasion, he says he forwards a nice note and says as they say, the apple doesnt fall far. A kiss on the cheek while she is sticking a knife in the back and front. So, boys, do you quet a sense o the dispute between doug and chelsea and how intertwined these entities were in terms of fun raising. Apple doesnt fall far from the tree. Is that a reference to mom or dad . Its got to be a reference to one or the other of the parents. Theres doug band saying that Chelsea Clinton is doing something insincere and it comes from one of the other of her parents. Thats how it works. Yes. Obviously, none of these people meant for this to be read in public. All of this is from stolen emails and what the Clinton Campaign has said is theyre not going to authenticate these emails. These they say this is being done by the russians in order to weapon wikileaks. One thing that comes into my mind, is the idea that if somebody whether it is russians or, state guided hackers or somebody, got these emails from people close to bill clinton, one wonders what emails havent come out they may have that they snipped off of mrs. Clintons private server. Cannot believe somebody doesnt have them somewhere. The question here, what were seeing are emails that were stolen from John Podestas account. What were seeing are fragments and bits and pieces he forgot to delete. Also seeing a lot of spam. Imagine what is in all the other players accounts around job and what else services might have gotten. Lets bring in ross lynn, the political investigations reporter at the Washington Post. Thanks for joining us. Thanks for having me. You want to weigh in . All these emails, you know, ultimately, when you look at this collectively, you wonder okay, where does the clinton global nicinitiative begin and along with taneo along with bill clintons personal finances. They all seem to meld together. Yeah, you know, theres been a lot of reporting, ive written a number of stories over the last two years and more about what appeared to be b this striking overlap between companies and individuals that gave money to the Clinton Foundation and people who paid money to bill clinton and his joint finances. Thats really bill and Hillary Clinton in a personal capacity. Sort of kind of notion that it didnt mean anything, it was coincidental, a network of people who support the clintons, but what you see in this memo that came out yesterday really in striking sort of black and white is that this was a strategy. An aggressive strat squi. On the part of doug band and others to p push people to do both. To give money to the charity, but also to pay money to bill clinton. And also to him. To his company. These are people who became his client sns. Yeah, exactly. So when he wrote this memo, he was trying to defend the company as you were describing some of those emails that were going ton through the fight with Chelsea Clinton. She raised the possibility that sort of he was kind of trading on her fathers name to make money for taneo and he was t trying to sort of lay out, oh, no, the clintons were getting more out of this relationship than taneo was. He laid out company by company, every client and how much money he and his partner slis itted for the Clinton Foundation and then for bill clinton. You know, guy, these emails are stinky. You can call them whatever you want. When i read them, i put them in the same category as the autopsy of donald trump which is awful. And yet, they kind of confirm what we knew. Donald trump is vulgar. We knew that. The clintons are conflicted. We knew that. What do you think . Is that a good assessment . Well, first of all, i think audio and video always hit you in the gut. More than anything, youre going to read, so hearing something out of Donald Trumps mouth is really striking. One thing thats interesting in these emails we received is that Hillary Clinton does email from time to time with john pode srk ta, but theres little from hillary and nothing from bill, so youre getting emails in which people are talking around them. That that said, i take your point that its kind of them atically, a lot of what its doing is confirming kind of things that have come out and been reported for a number of years about the Clinton Foundation and about the world of the clintons. And also confirming to me in a way and your reporting has been really superb on this. This is kind of the way a lot of business gets done. Right . Yeah. Absolutely. Based on relationships and ill make an introduction here and if you pay them, if you make a donation here, youll get him for 180,000 for a speech there. So, nail for me, nail for whats wrong with all this. I think you make a good point. Why do celebrities get paid appearance fees, right . Because theyre celebrities. Exactly. You can see the global celebrity of how much its worth to be a clinton. I think its interesting, the Clinton Foundation does really good work around the world. Highly respected work, but you can see kind of clearly, the way in which it was also used to make money. When he went around the world giving speech, what did he talk about . Would he have made that much if people didnt think it was possible his wife would be the next president. Over time, president s incomes and speeches tend to decline in val value. That didnt happen with bill clinton. Expresident s in the country have a great ability to make money. I do think that the the fact the clintons have remained in public life, thaifr remained players in the world stage, the two have kept up their earning power in a way thats unusual. And she was in office during the time. Right. Thank you so much. Eamon, thanks to you as well. Thank you for having me. Oil prices stabilizing near 50 bucks a barrel, so what will the Big Oil Companies say when they report results . Plus, a deer running loose in a diner. That story is coming up on power lunch. A deer visiting a diner in indiana and she wasnt there for the chicken and the basket. She smashed through a window, ran around, crashed into thing, slipped on the tile floor and then exited through the same window. Holy smokes. That was fast, man. The deer stayed in the diner, they could have had venn senn specials for weeks on end. That was not a deer in the headlights. A deer in steak, burgers. The deer was not exxon mobil and chevron both reporting results tomorrow. What will they say about move higher in oil prices . Were about to get the closing trades. Stay with us. This is my retirement. Retiring retired tires. And i never get tired of it. Are you entirely prepared to retire . Plan your never tiring retiring retired tires retirement with e trade. Im in vests and as a vested investor in vests i invest with e trade, where investors can investigate and invest in vests. Or not in vests. Sign up at etrade. Com and get up to six hundred dollars. Recengrand prix race carsbenz made history when it sold for a record price of just under 30 million. And now, another mercedesbenz makes history selling at just over 30,000. And to think this one actually has a surroundsound stereo. The 2016 cla. Lease the cla250 for 299 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Happening now, Hillary Clinton taking the stage in w winston salem, north carolina. Michelle obama with her, donald trump speaking in ohio. See that on the right hand side of the screen. Big interview coming up tomorrow. Trumps running mate, mike pence, is going to be skauk box. The bataclan concert hall in paris is unveiling a new exeter nor nearly a year after the terror attack. The venue was set to reopen in november. 130 people were killed inside by terrorist gunmen who stormed the theatre while an American Band was performing there. Southwest airlines is raising fares by 5. The announcement comes one day after the low cost Airline Stock took a beating after it reported a drop in revenue. No word on whether other carriers would follow. A new survey shows shoppers plan on buying less for others and more for themselves this holiday season. In a survey, they said they will drop over 935 on gifts for others, a slight decrease from last year, but predicted spending on themselves might increase by some 4 . If that doesnt get you thinking about the holiday, this should. Thanks to the science of snow making, killington mountain is now open for the winter ski season. Back to you. Thank you very much. We are 90 minutes from the closi closing bell, stocks are mostly lower, but by the slimmest of margins there. There you see the dow industrials off about 91 points. S p 500 flat. The nasdaq is down 18 points. About a third of a percent. Crude oil still hovering below 50 a barrel at 49. 67, but thats up a half a buck on the day. What might the signal be for a deal . Lets bring in dennis gartman. Great to see you. Good to be here. There was a note out saying the probability of having a credible opec deal come thg sunday is at 60 . What say you . To come up a an i agreement, may may get one, but as long as the Largest Crude Oil producer continues to stay outside, were going to produce as much we can and why should we not, as long as you have problems in nigeria financially and venezuela, if they could get their act together again, if we get to increase production, as long as you have the iranian continuing to increase production, and having the chinese removing themselves from the market where they had been buyers if for their own spr and having removed themselves, i think its going to be difficult even if they get an agreement to put Prices Higher at all if at all. Say theres no credible deal. How much of a premium is emb embedded now if for o pem . I think a ul of the price of a potential agreement that might be adopted has been put in. Maybe, maybe we get wti back to 52 again. I think that will be difficult. Maybe we get brent, the official marker fo 54 a barrel. The con tang o continues to be wide. You got a 5 con tang o, so if youve got a 54 or 55 crude one year forward and every fracker almost anywhere is going to be profitable at those levels. Banks are going to force them to ledge. Its going to be difficult to push above 52. Over the weekend, no deal. Come monday, whats crude trading at . How much to the downside . 46 quickly. It will go down fast. I doubt theyll be able to push much below 40 dlrz. So i think were stuck between 40 on the low end. 50 on the highend, which is not such a bad thing for producers and not a bad thing for consumers. That might be the bes t of all word worlds. Thaungs. Exxon and chevron are set to report earnings tomorrow morning before the opening bell. Exxon has been in the spotlight for fraudulent Climate Change documents. Stock hasnt been impacted yet however. Earnings, will they help or hurt the company tomorrow morning . Lets bring in pave low, Senior Analyst at Raymond James and Stewart Glickman at cfr research. Neither one of you guys are particularly enthused about exxon. Let me ask you first about these issues with Climate Change. I see a lot of people saying theyre politically motivated. Do they play any impact into what youre thinking when it comes to exxon . Is that why your negative on the stock or is is it Something Else . No, its completely different reasons. Were negative on exxon because at Raymond James, were looking for oil to be in the 60s. By the end o f the year. And exxon simply does not offer the operating leverage to that kind of oil recovery. You know, the climate issues and the sec asset value issue, its headline risk, yes, it can you know, be impactful. Daytoday for the tok but its not going move the needle in terms of financial results. Most people say, gosh, that would be good for exxon. There are other stocks that fell more. Youre looking at leverage from a rising oil price. You want to go after other stocks that were hit even hard. We just downgraded today from hold to buy. Early results look mediocre at best and so, theres really not a lot of places that exxon can turn to for significant earnings growth. It looks like a tepid quarter for exxon. Neither one of you seem to like chevron much better either. When i built that model portfolio, i kept thinking about chef lon at 6 . Now, around 4 . Relatively speak, chevron should be better positioned, but theres so many better ideas. Marathon oil, mro. Hess. Anadarko. Lots of other, including larnl caps that simply you know, will give you better leverage. Stewart, what are you better ideas . Yeah, we think that chevron just has too much risk now. Its trying to balance pretty hefty dividend increase, excuse me, hefty dividend spending along with trying to streamline the company. Were worried that production is going to eventually turn into a shortfall. Names we like better, eog resource, noble energy and Occidental Petroleum as well. Large cap names. Thanks so much. Got to get to josh. Thats right. So, we are here in cupertino, california, where tim cook just got off stage. He unveiled new mac book pros today. They are 17 thinner. 23 smaller. They weigh about three pound, so about a half pound lighter than the older models. Of course, also more powerful. Faster graphic, faster memory. These new pcs are going to run on sierra, the new mac operating system. That means that sira, the voice substantiate, will be coming to the mac. In terms of new features for these pcs, they were touting for example, a new feature called touch. The touch bar. This is going to be this multitouch keyboard strip that kind of sits on the machine and what it does is the inner face changes depending on what youre doing. So, shortcuts for example on email will be different than shortcuts you would use when youre surfing the web. Kind of interest, bringing some touch elements, touch functionality to these machines, even though theyre not a touch screen. In terms of what it means for investors, obviously, listen, the mac represents about 10 of total sales. Its been a line thats been under some pressure. I talked to tim cook about that. He said youre dealing with tough comps. He also told me when you have this many rumor, that had a pause on demand. So, if youre looking ahead and youre willing to bet that you think there is pent up demand, if you think you can get these pcs to consumers and companies perhaps, the apple bulls would be betting that might be a positive tail wind ahead. They might not have suspected in terms of availability and price, new mac book pros are available today. 15 ifshlg version cost 2399. 13 inch cost 1799 and a 13 inch macbook with more of the pra additional function keys will run you 1499. Back to you. Thank you very much. Heard from apple. Now two other members of techs a team, alphabet and amazon will report after the bell. Well get you ready for those reports when power returns. Hey gary, what are you doing . Oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. [ thats a good thing, eligible for medicare . But it doesnt cover everything. Only about 80 of your part b medical expenses. The rest is up to you. So consider an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement insurance plans, they could save you in outofpocket medical costs. Call today to request a free decision guide. With these types of plans, youll be able to visit any doctor or hospital that accepts medicare patients. 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Keeping in mind that five quarters ago, we saw a move of 16 . So, the one thing i would say in terms of google option t way the market is presenting it, its really not positioning for any type of breakout of break down. It looks like its going to be a status quo quarter here. Sounds how hum in terms of the stock performance, erin, alphabet has been a solid performer, but not an o outperformer. Weve seen a lot of these Internet Services Companies Like stacey just said, act more like Media Companies. And when you look at the industry as a whole, so far, four of the seven have beat, theyve maintained guidance and we really havent seen any big moves. Theyre priced pretty high. About 24 times forward earnings with about 14 expected growth. So, were no longer seeing these 50, 60 types of earnings growth. Theyre really, theyve all come down in general to more of these mid teens, so better than your market average, but more reasonable and overall, we would focus more on inves vesting as the industry as a whole rather than taking volatility. Thanks. Aaron gibbs and stacey gilbert. For more, head the to our website. Shares of amazon are up more than 20 this year. So what can the company say today that will send the stock higher . Plus, michelle gets behind the wheel of a lamborghini. Power lunch will be right back. Amazon shares slightly lower ahead of earnings after the bell. Down about a quarter of percent. Check out this stat from our partners at ken show. 30 times since the companys ipo, amazon beat by an average of four cents or more. 70 of the time. The next day, it trades almost 6 hire. Wrap your head around that . So far this year, amazon is up 22 . So, can amazon keep going . Tom forte is the Consumer Internet analyst with maxim group. For the one or two numbers that you think are most important today and what do you expect . Sure, so the two most important numbers are p percent of sales from Third Party Sellers. Were looking for 50 up to 46 last year. And 49 last quarter. When you think of the profit buckets on amazon, Third Party Sellers would be the second most significant source of profits. Why is that . Because thats where theyre getting the commission on the s the transactions going on amazon. The most important bucket of profits is Cloud Computing effort. We are looking for 52. 5 Revenue Growth which would be slight deceleration from last quarter but would represent 10 of revenue and given that that is the largest source of profits those are the two most significant numbers. Growth in Cloud Services take it up to 10 and growth in the third party seller. If you look at what amazon is doing, theyre positioning themselves to maximize the yield of Fulfillment Centers for holiday this year. They had price increase december last year. They are adding 18 Fulfillment Centers. Last year they added six. To the extent they fill Fulfillment Centers with holiday merchandise, higher margin sales for amazon they are well positioned for the holiday. I noticed personally that when i use a Third Party Fulfillment rather than directly with amazon delivery isnt as certain. You are not as certain when you will get it. You cant get it the next day. Fulfillment isnt as good over time. Definitely. If you think about amazons fulfillment by amazon effort the Fulfillment Centers and buying products that amazon is delivering then much more likely to get the product. Isnt that risk the more and more they rely on the third party, doesnt that risk the experience that people like so much about amazon . Because increasingly the third party units are being sold on the amazon platform with fulfillment by amazon and shipped by amazon then you are getting reliance on delivery. Spending a lot of Time Investments in india on logistics, opening new warehouses. Are you concerned about margins . To the extent that the Cloud Computing effort continues to grow at accelerating rate versus retail then i think they will be okay then if you look at the business as they have more Third Party Sales going on amazon i think they will offset investment. Do they need to keep cloud and retail together for financial reasons . Does one feed the other business . To me they are completely different businesses. What is the percentage of amazons revenue that comes from cloud . If it is 10 now it can be 30 over time. It is basically the atm that enables amazon to invest in the retail efforts. They are expanding in apparel and grocery. Grocery is a low margin category. They announced they added dallas and chicago. They need the money to come from a higher margin category, in this case Cloud Computing to fund their efforts. If alexa were here now and we asked her how much money is amazon going to make this quarter she would know, right . She would know. If you ask who will win the world series she would say the cubs. Check please is next. You will see my joy ride in a very expensive, fast and cool car. Its your tv, take it with you. With directv and at t, watch all your live channels, on your devices, datafree. Switch to directv and lock in your price for 2 years. Offers starting at 50 month. Robert frank is with us. You and i got fast food today in a fast car. This was fun. Check it out. So i brought you a little present today. This is the 2017 lamborghini spider. Beautiful. Spider because it is convertible which is a big seller in the united states. This thing does 0 to 60 in 3. 4 seconds. Wow. Where are we going . Mcdonalds. All day breakfast. Your favorite. Yes it is. We are only doing 35. You were not going that fast but the car is designed to make you feel like you are going fast no matter what the speed is. It makes you feel like you are on a grand prix racetrack and you are going 35. There is torque in your stomach. The second you accelerate it gets you in the stomach. Didnt spill your coffee. It was like a human gyroscope. The great thing about this car is that it really all your senses are heightened in the car. You feel the road and the power and hear the engine. It puts you in touch with a machine and the road in a way that very few cars do. Im very relieved that you didnt go to the drive up window. I would have been afraid that you scraped the door. Number two, you wouldnt be able to reach because that thing is just throwing it into the car. They would have all looked. Tyler wanted to know about how it is in the snow. That car is great in the snow. Four wheel drive. All wheel drive and as michelle can attest lamborghini is owned by volkswagen audi. Even on a wet slick road with snow coming down you can peel off. It is so stable. Four wheel drive. How much is this . How many are they going to make . Lamborghini only sells around 3,000 cars a year. About half as many as ferrari. They just started delivering these. This car goes for 316,000. That was an expensive egg mcmuffin. Did you eat in the car . I ate in the car and drank coffee in the car. Probably mortified when they got it back. I didnt spill anything. Breakfast all day in a lamborghini. Its the new car smell. No, egg mcmuffin. Horsepower lunch. Not a powerful lunch. Somebody is calling me on my phone. Maybe it is lamborghini. Your phone rings, too. Thank you. Great to have you. We were just talking about amazon and occurred as we were discussing it. There were two brands online that are ubiquitous. One is google. The other is amazon. I go google something and check amazon if i want something. That is the brand power. Full coverage of reports tonight at 5 00 on fast. Closing bell starts right now. Welcome to closing bell. Im Michael Santoli in for bill griffith. 38 billion biggest chip deal ever. We have Goldman Sachs global held coming up. We have a busy pipeline. About 150 billion this week alone. Meanwhile aetna saying it expects more