tv Power Lunch CNBC April 30, 2012 1:00pm-2:00pm EDT
the year. do with it as you wish what i'm doing is tightening my long positions. >> that does it for us. don't forget to catch more "fast money" tonight at 5:00 p.m. follow me on twitter @scot scott wapner. "power lunch" starts right now. >> scott, thank you very much. welcome to a very busy monday afternoon in our hour of power. sue is very much alive at the new york stock exchange. stocks not so alive today. been a down day so far. we got several big stories that we're following at this hour including of course microsoft's sizable investment in barnes & noble nook e reader. and apple's tax strategy is basically avoid them. should there be some sort of an itax. and dodge's new dart.
also on the show today, a milestone in lower manhattan. this building right here going up. a big day for the freedom tower. but first, we begin again with microsoft. the company making a $300 million bet on barnes & noble today. and jon fortt has the details live in san jose. jon. >> yeah. that's right, tyler. this deal is really a lifeline for barnes & noble. you can see how investors have reacted. it also provides some opportunities for microsoft getting into this business. but let's take a look at what this really provides for both companies. first of all, barnes & noble and the nook not out of the woods yet. according to financial filings, the nook operation is part of barnes & noble is part of a $102 million loss that's just last quarter alone. again, this is a $300 million investment. so that gets you through a few quarters. but several challenges including the fact that the agency model where in e books is a think of the past, pretty much.
amazon's going to be steeply discounting e books. that will make it harder for the nook to make money. for microsoft, they get more than just the nook. they get an investment in the college business. the nook has a 28% share of e-readers, but barnes & noble college has almost half of barnes & noble's total stores. it serves more than 4.6 million faculty and students. and has stores in 42 states. so a retail platform for microsoft's windows 8. tyler. >> questions about this deal. raf editor at large at c net. welcome. is this deal sizable enough to move the needle for microsoft? what does it mean for them? >> this is a way for microsoft to really get into the tablet business through windows 8. barnes & noble with this new company we think will be making windows 8 tablets and windows as we know it's the new operating system for microsoft and has to
compete with android and the ipad. >> this has not been an effort to get into the book business. this is an effort to get into the tablet business. but that nook is the number three tablet by far. are they going to be able to make it competitive with amazon's product and then with apple's product? >> well, amazon first. what microsoft has to do with supporting the nook tablet is get windows 8 out there and show the nook plus microsoft can compete against amazon and android with the kindle tablet. if that is successful, more developers will fall into line and windows 8, microsoft hopes, could compete against ios and ipad. >> what other moves might microsoft been thinking about now? >> they've only been into readers. getting into the content distribution model does work as a business. this is one thing. other things that microsoft might be looking at is some of the hot companies out there that have big social footprints like pinterest or the cloud storage business chrks is very big right now. and microsoft has some efforts there. they could be looking at drop box or box, why not? >> rafe, thank you very much.
sue. >> watch shares of monster beverage. they're soaring right now. a new 52-week high on reports that coca-cola is in talks to buy the energy drink maker. right now they're up better than 13%. darren rovell has been covering monster since before most people even heard of it. and he's live back at hq. hi, darren. >> sue, i want to show you how big energy drinks are and why coca-cola wants to buy monster potentially. let's look at the energy drink market overall. you see that 17% versus the rest sports drinks up almost 8%, then you see beer and bottled water. then take a look at the energy drink by dollar sales according to symphony iri in the past year, red bull, private, obviously. monster, rockstar and nos, coke brand, full throttle, burn, coca-cola and pepsi as well. they have not been able to crack through the fastest growing piece of the beverage industry, and that has been a frustration.
nor do they believe it appears they've just come up with an energy drink by themselves. so it looks like the easiest thing is to buy one, sue. >> buy one if you can't make it yourself. thanks, darren. meantime profit at the world's biggest beer maker losing froth today. anheuser missing estimates today. the company also cautious about its outlook and shares are down 1.25% and change. there's a little more suds on "street signs" today because peter coors will be joining mandy and brian. that's in the next hour at 2:00 p.m. eastern time. another very busy week on the earnings front with pfizer reporting tomorrow before the bell. what's life like for pfizer now that the generics products like lipitor, pfizer's blockbuster anti-cholesterol fighter is out there. seema mody's been getting ahead of that part of the story for us. she joins us now. >> hi, sue. that's right. it will be pfizer's first quarter post patent expiration. the street is looking for a 6% drop in sales to $15.4 billion
and a similar 6% drop in pfizer's profit growth to 56 cents a share. now, with lost lipitor sales, expect the earnings call to focus on pfizer's late stage pipeli pipeline. analysts are particularly interested in getting an update on rheumatoid arthritis pill up for review in early may. and it's alzheimer's drug, high risk, potentially high reward bet. analysts also expect to hear about the drug giant's restructuring plans including the spin-off of its animal health unit. just last week the company completed the sale of its nutrition unit to nestle for $11.8 billion. jpmorgan views this sale as a positive and expects pfizer to spend much of the net proceeds on share buybacks, which over the next year could lead to a 6 to 7 cent increase to pfizer's earning per share. ahead of earnings the stock trading in negative territory. sue, back to you. >> actually, coming back to me, seema. thanks very much for that. and i guess it is a busy week for a lot of the pharmaceutical
companies, seema. seema? >> i'm sorry. given the fact that it has one of the biggest companies in the pharmaceutical space, so given the fact that they lost lipitor, the question is how can other drugs in their pipeline really offset the losses in terms of lipitor. we'll have to see tomorrow. >> seema, thank you very much. jeff kilburg with kilburg capital and he's our stock master for the week. he's going to be here showing us how he is playing the market. and let's start now, jeff, with pharma. notably pfizer is not on your buy list. it begins with watson pharmaceutical, why? >> it does, ty. if you look at that acquisition last week of $5 billion acquire of activist has made a game changing deal for them. they're going to be the third largest pharma in the world. secondly, the synergy's there now they'll open to a global market. that's the biggest difference in the generic market. you need to have the global platform for distribution. i like novo.
seeing the insulin demand seems endless. the diabetes epidemic continues to grow as eastern countries adapt to western civilization and eating habits. finally, i like teva. they are the big dogs. number one in the pharmaceutical world. and they epitomize the saying of go big or go home. they have a global platform and continuing to acquire. i think all three have seen a nice buying opportunity here in the pharma, ty. >> number one in generic pharmaceutical -- >> excuse me. number one in the generic, which i'm focused on inside the pharma. >> fantastic, thank you very much. sue. >> ty, platinum prices just closing. while gold, silver and platinum may grab the headlines, there's one metal outperforming them all this month. sharon epperson joins us with exclusive data. >> hi, sue. we're talking about palladium. palladium's gains have outpaced all other metals so far this month. and after climbing in fact double digits in the first
quarter, we've seen platinum down about 5% this month. meanwhile silver's down about 8%, copper down 2%. gold's even lost its luster. but look at palladium. we have seen this metal, it's used in catalytic converters for cars helping to control exhaust systems, it's actually revved up about 4% gain. and that's after falling fractionally in the first quarter. so what has changed? >> we've seen a recovery in sentiment, good auto sale numbers coming out of the u.s. and of china, and that's helped, i think, investment demand for palladium. >> now, that's been driving investor demand into some money flows into exchange traded funds as well. we got an exclusive look at a new survey from etf securities. and it shows that the flows into its platinum etf under pall have outpaced flows into all other metals etfs that it has so far this year. we are looking at investors
purchasing nearly seven times as much palladium and platinum ounces as gold in the first quarter. this is based on flows into etf securities u.s.-based etfs. investors bought 197,000 ounces of palladium in the first quarter versus 34,000 ounces of gold. now, i must point out investment demand in palladium makes up about 5% to 7% worldwide. so it's still really industrial demand that's driving this. that's why many traders say investors want to have this. they want to have another metal in their portfolio in addition to gold, perhaps. and this is one that they're choosing at the moment. sue. >> sharon, thanks so much. >> sure. >> now for the health of the housing market. despite record low mortgage rates, home ownership rates in the usa are now at 15-year lows. diana olick is live in washington for us. hi, diana. >> hey, sue. you know after rising slightly in the middle of the last year, home ownership appears to be on the decline again falling to
65.4% from 66.4% a year ago that according to the u.s. census. this is the lowest rate since the first quarter of 1997. and analysts say it will remain a headwind for the equities today. home ownership peaked at just over 69% in 2004. on the flip side, both homeowner and rental vacancy rates dropped in q-1 of this year, which is a potential plus for both in terms of pricing power. rents are still rising. that trend, believe it or not, is expected to continue despite incredibly affordability because home ownership is out of reach for many americans with low credit scores, no down payment, little equity or no faith in the housing market. >> the latest shot in the fight between the romney and obama camps over the killing of osama bin laden was just fired by mitt romney. john harwood live at the white house. the general election campaign is underway, isn't it, john? >> tyler, it's well underway. and this exchange is reminiscent of what happened a few years ago
when the bush administration used national security in 2004 to say we will keep the united states stronger, safer than the democrats would. a lot of democrats cried foul saying you shouldn't politicize national security. now the shoe is on the other food #foot president obama is taking credit narrated by bill clinton his initiative to go after osama bin laden and raises the question whether mitt romney would have gone after osama bin laden in the same way. romney was asked about it in a rope line today. here's how he responded. >> even jimmy carter wouldn't have given that order. >> so there you hear from mitt romney saying that even jimmy carter would have given that order. it's understandable why mitt romney would come back that way, but of course the advantage that president obama has, which he's trying to exploit, is the fact that for the entire bush
presidency, president bush tried to go after osama bin laden, didn't get him. president obama did, sue. >> indeed. very good point, john. thank you very much. you know, in the '70s there was one on every street, every block in suburban america, but nobody wanted to admit it. you guessed it. it was the dodge dart. it's back. better than ever. phil lebeau's up next. also ahead, the new freedom tower in lower manhattan just around the corner from where i'm standing hits a major milestone as construction workers keep moving towards the sky. we'll have that story for you as well. but before the break, the tallest buildings in the world. and coming in at number one is in dubai. more in a few minutes on "power lunch." it's very important to understand
how math and science kind of makes the world work. in high school, i had a physics teacher by the name of mr. davies. he made physics more than theoretical, he made it real for me. we built a guitar, we did things with electronics and mother boards. that's where the interest in engineering came from. so now, as an engineer, i have a career that speaks to that passion. thank you, mr. davies.
the playboy bunnies have hopped out of chicago now for good. the famous company born in chicago, but the final staffers left the windy city and they have now decamped for company headquarters in los angeles. first playboy magazine was put together in hugh heffner's chicago apartment in 1953. all right. maybe the most important new model to come out of chrysler in some years, but can the automaker hit a bullseye behind
the dart. phil lebeau is behind that one. >> especially as the company moves from a truck-oriented to a more balanced portfolio, the dodge dart will go into production relatively soon. once it does, this will be crucial to helping chrysler as it tries to boost its sales in the small car category. it will start at just under $16,000. more importantly just below some of its competitors. it replaces the caliber in the small car category. when you look at that category, look where the caliber was relative to its competition. it is way behind. number nine in that category. ten times more corollas sold. sergio when he went to chicago said that this dart is crucial to expanding the company's portfolio and its production. and that's why they'll be adding 1800 workers at that belvedere plant once that's into production later on into the fall. later he was also on hand in
detroit as the company announced it's going to be moving his office along with 70 other executives into a downtown building known as the dime building, but they'll rename it as the chrysler house. again, this is more symbolic than anything else. the headquarters still in auburn hills. but for chrysler opening these offices downtown incredibly as important as detroit it's been a big part of their campaign. look at shares of chrysler fiat, it's struggling right now, tyler. that's the latest on chrysler. this will be a very big spring for that company. >> all right. phil lebeau, thank you very much. several big activist shareholders are on cnbc today. you probably saw bill ackman this morning, this afternoon we're going to hear from carl icahn. right now kayla tausche -- >> the activist journalist. the hedge fund community fond of the phrase past performance not indicative of future returns. even though they're some of the best performing activists out
there, they have a lot at stake this proxy season. we want to start with bill ackman's square. perhaps the winningest in the crop facing a fight over railroads at canadian pacific nominating seven directors and shareholder support for ackman is growing ahead of that meeting on may 17th. and this morning on "squawk box" he says he's never gone into a vote with such a lead, to use his words. but boosted dividend to shareholders and ackman's investment has already made 76% on an annualized basis. stay tuned for what's going to happen in just about two weeks time. >> let's bring in jeff kilburg now. did you know jeff played center at notre dame? >> i did not know that. >> meet an irishman. which one of these activist investors would you be following? can you make money by doing it? >> i think the activist space is wonderful for the american with the voice in the boardroom. it's nice to see the momentum take place, but really i like
the barnes & noble story. janney partners came in. you saw about 18% movement after they took that 12% stake. and now we saw the nook kind of spinout as a wonderful, wonderful way to play it and coat tail these guys. >> you can really win if you hit it. >> jeff was saying -- >> he was on, right? >> yeah. >> that companies are a little more receptive when you're going to them as an activist a little better at maybe taking some of your advice to heart. and when companies have actually taken value advice those holdings are up about 300%. he said he's focused on motorola solutions, bought that from icahn and focused on getting as much cash off the balance sheet as possible and improving margins. >> what happened to ackman? >> he brings that angle like checks and balances. he has a season veteran track record established. he's going to come in and do great things. i'm fully supported and in the trade. >> what about icahn? some people say he's losing his luster, cancels his own wins
with losses. >> he is the original corporate radar. in the '80s he was there with t. boone and they established themselves, i think he has that touch but right now i'm shying away from carl icahn because he's had a rough couple years. ty, i know you've seen it, but just a few blocks from my post here at the nyse, a beautiful sigh the new world trade center, which is in progress, it's called the freedom tower. and it is now taller than the empire state building. the construction of course is continuing as we speak. but for all intents and purposes, this is now once again the tallest building in new york city. when construction is finished, the freedom tower will stand 1,776 feet tall with 104 floors. and it is really a stunningly beautiful sight. ty, back to you. >> thanks very much. that is the dow 30. there they are. about ten of them higher. 12 of them higher. one unchanged. coming up, which stocks in the
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"angry birds," all the rage for just about anyone who has an ipad and a thumb. the game is now so big it has spurred a theme park in finland where rovio, the intentertainme company behind "angry birds" is located. >> the fins hope this could be their answer to disneyland. it's the first official angry birds theme park. and it could soon be coming to a site near you. rovio has launched this 5 million euro park to grow the brand far beyond games and finland's borders.
it's got rides, slides and the pigs and birds that are synonymous with the games. kids can play on giant touch screens and smartphone users get updates the moment they walk through the entrance. the angry birds theme park is all about going from the digital world to the real world. the people behind this park want the children who enjoy their games at home to get outside and get active. and of course they also want them to buy stuff. lots of stuff. on site shops sell everything from stuffed toys to branded drinks and lunchboxes. >> a number of tourists. >> rovio says there are plans for bigger and better parks and it's certainly proved a hit with these guys. >> it's very cool and very nice and very fun. >> so that's the theme park, but it doesn't stop there for the guys at rovio. there's a tv series slated to start later this year. they've also got a film in the pipeline. they want to open more of those
theme parks across the world focused on china, the u.s. and other parts of europe. not bad for a company that almost went bankrupt back in 2009. back to you, tyler, in the studio. >> thomas, thank you very much. the metal markets about to close for the day. the final countdown is on for them. and we are going to hit the floor next to show you where everything from a to zinc is closing. do we need an itax? how apple's been able to skirt its, some would say, fair share. the company of course disagrees.
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gold prices closing right about now. sharon epperson is tracking the action at the nymex for us. hi, sharon. >> yes, we are looking at gold prices right now. you know, it's been a rather lackluster month here for gold, but gold has managed so far today to cut much of the losses that we saw. we saw a lot of the riskier assets down on the session, but gold prices right now look poised to close almost flat here at 1664.60 an ounce. meanwhile, we have some firms that are cutting their longer term forecast for gold. hsbc lowering its forecast from
18.50 to 1760 for average price of gold for 2012. gold still down for the month but doing better than the other metals so far in april. back to you, sue. >> thank you very much, sharon. all right. check out the shares of sunoco, they're up 20% today on an otherwise down day after the pipeline operator energy transfer partner says it will buy the company for $5.35 billion. nice work for investors if you can get it, but that's kind of an anomaly in today's trading session, right, bob? you're saying the economic data hasn't been good enough. growth isn't good enough. >> it's almost like the worst case scenario, the ism numbers this morning, the regional manufacturing numbers from chicago and dallas were terrible. they've been terrible for a while now. we're hopeful with the ism tomorrow. now we're going to get 2% growth some people are saying in gdp. that's not enough for the federal reserve to jump in, but not enough to get a job growth. so you have this stagnating economy and i think that's being reflected in stock prices today. volumes are terrible today. looks like a lot of people
stepped back. look at the hard asset companies like material companies, gold companies, home builders, all were up. these are all people owning hard assets. they had a very good week. today everybody's acting like nothing happened again. they're basically taking profits. i think that's a sign languishing what we're seeing. >> what will help? >> the ism number tomorrow is very important. this job number, 175,000, a lot of people are now at 125,000 jobs. goldman at 125,000. again, this is 2% gdp. we've got a problem. we got to do worse or we got to do better. if we get 1%, the fed will step in, if we get 3%, we get job growth. 2%, forget about it. >> i'll do glass half full. >> all right. >> let's head to the nasdaq. courtney reagan is with us now. she's following the big movers over there today. hi, court. >> good afternoon, sue. the nasdaq composite is the
biggest laggard of the bunch today when we're talking major indices down about 0.7%. could have a negative nasdaq for the first time since 2006 as far as for the month is concerned. apple weighing on the nasdaq 100 and composite down about 2.7% after the "new york times" had the article detailing apple's very legal tax strategy. look at shares of warner up higher more than 16%. the company confirming it is looking into strategic alternatives to enhance shareholder value. so far shareholders are liking what they're hearing. back to you. >> to the bond market now. let's see how bond traders are playing today and setting up for this week's jobs report. rick santelli tracking the action at the cme. bob just mentioned the fact we do have data out this week and high stakes data at that. >> absolutely. he was spot-on with regard to manufacturing. and if you recall, last month chicago purchasing manager survey but the national number to some extent also showed weakness in the employment
indices that translated into weak jobs report. that employment index within today's chicago report improved by a little over 2%. we'll have to see wednesday and friday. look at the year-to-date charts of 5s, 10s, 30s and ultimately the dollar index, remember, credit market playing antagonist towards positives of both the u.s. and global economics, if there is any on the global side. i think europe there. as you can see, whether it's the 5-year or 10-year, comps go back to february. and even more how there was big drops of lower yields in january we're not going to change those comps. 30-year bonds, the fly in the ointment, one day last week traded a little lower yield than it is now. the last dollar index, and the fed meeting really sped up the selloff hovering at lowest level since february as well. tyler, back to you. >> rick, thank you very much. the market has been flat for this past month following a spectacular run in the first quarter of the year. concerns now about europe creeping up again, just like last year. so is it time for investors to sell? and as the saying goes, sell in may and go away.
let's bring in our friend and power player, richard madigan, chief investment officer of global access portfolios at jpmorgan private bank. richard, welcome. good to see you. last year at this time the second and third quarter stock market trading was all about greece. is it going to be all about spain this year? how should i think about spain and what it may mean for me and my portfolio? >> it is right now. and i was going to kid the sell in may and go away theme that seems to be in rampant right now. the best headline i read in a research piece this morning was go away in may, but don't sell. i think we're at a stalemate in the markets. that's okay. a large part in what we see in terms of broad support for ltro and liquidity from central banks has been constructive in taking the left tail risk out of markets. and your point on greece, i literally remember being here last year talking about the most clearly advertised of train wrecks. we expected that it was structuring. all of that was very obvious. i think this time around and i was listening to some coverage this morning, we aren't expecting that in spain. so we see a lot of challenges politically. we see a lot of policy
challenges. a structural issue with regard to recapitalization with banks that they can afford to address, but it does mean we're going to sit for a couple months in a bumpy, choppy, wobbly environment which seems to be the new market term. what isn't obvious is markets break. we have fair acquisition on equity, europe matters a lot in context of where we're going in markets, but spain will be a distraction as are french elections, greek elections, dutch elections. >> and american elections. >> yeah. not for a while. sorry. >> sue. >> that's okay. given that if we are going to have kind of a choppy summer, how do you invest against that? before when we talked to you you were barbelling some of your strategies. has that changed? and how would you do it? >> it hasn't. it's funny i feel like a repeating record from the last month i was here. still very high on the show me the money trade. so credit, high yield investment grade, high dividend yielding stocks. in the equity space we're
aggressively playing what we do in growth. so technology. some industrials we're even brave enough to look at home builders right now. bob talked about real assets. there's a lot of opportunity. what we're not doing is chasing markets right now. and the hedges end upcoming back to a little more cash, we're very light on core bonds, macro bonds and gold in portfolios. >> at what point, richard, might you nibble at europe? >> that's a great question. we had our global investment committee meeting this morning in the firm. and europe iss the operative issue. look at what happened in october last year in terms of the s&p. we've seen a rerating in multiples of almost 3%. we've gone ten times forward p/e to 13. we feel good about where the u.s. market is right now. europe is cheap and is for a reason. earnings don't look great right now. we're watching a contraction in earnings. the bigger deliberation for me is what happens with regard to sentiment in the core. when i was here last time we
talked about the fact we thought core europe could grow half a percent this year. with the uk in double dip, spain in double dip and with my guess is what's going to be a lot of reticence in additional liquidity, it's going to have to get a lot worse than better. that probably weighs on consumption, it probably ways on sentiment a bit more. and we may be looking at core europe that ends up being more protracted in terms of slowing growth. >> and if europe is slow, china's going to be slow. very quickly. or slower. >> 30% of chinese economy is exports. 20% of that -- so 6% of china's gdp is tied to europe. china's still going to grow 8% this year. >> not so bad. we'd like that. >> yes, we would. >> richard, thanks so much. >> sure. >> sue. >> let's recap some stories today. humana dropping some 20%. it missed the street's estimates. stock at new 52-week trading highs. e-bay trading at levels not seen since february of 2006.
the gap is at levels not seen since august of '01. and dollar tree at all-time high levels back to its ipo in march of 1995. coming up next on "power lunch," you just heard richard madigan talk about it, spain slipping into recession, greece is a mess with debt. so what is the best way to fix europe's debt crisis? some of the smartest american high school students are meeting at the new york fed today to unveil their plans. we have them here on the floor of the nyse. we'll talk to some of them coming up next. look, every day we're using more and more energy.
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director: [ sighs ] cut! sorry to interrupt. when's the show? well, if we don't find an audience, all we'll ever do is rehearse. maybe you should try every door direct mail. just select the zip codes where you want your message to be seen. print it yourself or find a local partner. and you find the customers that matter most. brilliant! clifton, show us overjoyed. no! too much! jennessa? ahh! a round of applause! [ applause ] [ male announcer ] go online to reach every home, every address, every time with every door direct mail. i'm brian sullivan from the milk institute in los angeles, california. coming up on a special "street signs," we have some big name guests. chairman emeritus of jefferies
will talk to us about his company. and eli broad, the only man to start two fortunate 500 companies is your special guest. and we'll talk to the pipeline division at transcanada. will they finally get that pipeline built? we'll find out. and mandy will debate whether or not the dow is irrelevant now. it is a bicoastal "street signs" coming up in just a couple minutes. i'll send it back to the "power lunch" team. >> all right. brian, thank you very much. 100 years later the titanic is getting ready to set sail again. the australian billionaire clive palmer building a replica of the hallowed ship at a chinese shipyard. maiden voyage expected to be in late 2016 and will be from england to new york just like the plans for the original. kate winslet and decap row autoto book a state room. >> absolutely. europe's fiscal problems, they continue to worsen. we talk about it every day here on cnbc. the new york fed is turning to
high school students to perhaps some some of those issues. the new york federal reserve hosting 25 teams competing in the challenge. and we are lucky enough to have some of those semifinalists with us today. so, we're going to go through the list right here. i'm going to start right here. victor victoria, you're from bloomfield hills, michigan. you're from fort pierce, florida. and zack with george w. hue let high school in hul et new york. and devin from connecticut. congratulations, guys. >> thank you. >> i'm going to go to each one of you and tell me what you came up with as the ultimate solution to some of the challenges that are very sizable and facing europe right now. victoria? >> a group at my school is ireland and high on employment problems. public solutions -- basically just promoting education in their country and involving more of the youth and getting the
youth involved as a growing generation coming. ireland in the problem it's been very supportive. we'll see what happens. >> terrific. ireland. okay. >> my school chose greece to focus on. >> something easy. >> yeah. >> just teasing. >> we focused on greece and we felt that the best way to help with the economic condition that's currently going on is to promote youth employment because that's what's really going on right now. youth employment and also tourism. >> all right. zach, what country did your team take on? >> we picked germany. and we decided to work on the ageing crisis. considering the fact that the most important thing that we had to change in germany was the highly regulated social policies including health care, which will allow for doctors and other students to stay in germany as opposed to immigrate. so by keeping people in germany, we could change the nation. >> zach, i think you have a mic on, devin, what country did you pick and what challenge? >> our group chose italy and we chose to research slow growth in
italy. we felt this was important because italy is the third largest country in the euro area. so it affects almost the global economy and some solutions we proposed were overall to improve competitiveness of the businesses in italy. and this is through a lot of growth just stressing education as well. >> so education was a theme for all of you it seems. that that's a big problem in the eurozone. perhaps less with germany, zach, than some of the others. but it seems you feel as though if the educational standards are bumped up and then youth unemployment, which is an issue, would ultimately be solved. is that a correct interpretation, victoria? >> i believe so. i think it's always specific to each country, but i think overall as a euro area concern, any sort of high unemployment 5.7 in germany. >> what was it like going to the new york fed and presenting these solutions?
were you nervous? >> well, being nervous was probably the biggest concern. we had worked for months on our presentations. and we had reviewed so much material. we would be working on friday nights until around midnight for weeks. so when it comes to work, we were prepared. just being nervous was the biggest concern we had. >> one of you may go on to the finals. you're all semifinalists at this point. what's been the biggest takeaway from this experience for you? >> the biggest takeaway, i honestly feel like -- i'm not sure. i don't feel like there are any takeaways for me. >> do you feel the u.s. economy is in better shape than most of the rest of the world given -- you had to do extensive research. are you more optimistic on the u.s. economy based on what you learned about other economies around the world? >> honestly, i feel like our economy is one of the strongest right now. and i think that a lot of countries should look up to what the u.s. is doing maybe to boost. i think our economy is great,
personally. >> all right. congratulations, guys. thanks for taking some time. i know that you guys have a busy afternoon. appreciate it very much. >> thank you. >> coming up next on "power lunch," apple is thrust into the heated debate over taxes. the tech giant set to make $40 billion in profits this year. but guess what, it pays less than 10% in taxes. see how they do it coming up next. people with a machine. what ? customers didn't like it. so why do banks do it ? hello ? hello ?! if your bank doesn't let you talk to a real person 24/7, you need an ally. hello ? ally bank. no nonsense. just people sense. tdd# 1-800-345-2550 checking the charts. tdd# 1-800-345-2550 looking for support, tdd# 1-800-345-2550 resistance, breakouts,
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welcome back to "power lunch." happy 100th universal pictures. the universal film manufacturing company created a century ago later incorporated as universal pictures company and finally universal pictures now a unit of nbc universal which is the parent of this network. some of the studio's best known features include "jaws,"" e.t." "the hunger games" giving scholastic a boost. thanks to stronger than expected sales of that trilogy. scholastic shares were on the upside slightly. the stock's been having a good run this year. now it's down 1.3%.
it has of course had a pretty good run. ty, over to you. >> thank you very much. time for the power run down. and today's players, this is a coupling, ladies and gentlemen. jane wells and bob pisani. and i'll join them just for good measure. let's start, folks, with apple and that big tax question. it jumped off of that front page story yesterday in the "new york times" on the money moves that apple uses to cut its global tax bill by billions. the double irish, the dutch sandwich, the whole thing. is this a tempest in a teapot? >> tyler, i'm shocked apple is acting like individuals do by minimizing corporate tax returns. i think the corporate taxes in california are 8%. they're 0% in nevada. i think we should have more uniform corporate taxation, that would be a nice idea. but i don't think we should vilify apple for taking advantage of it. >> it's california that's losing here. >> oh, gee, i'm so shocked at
that. here's my take on this. a lot of people think they love apple so much. it's like a cult. you might call it a religion. call it what it is, make it a religion and it doesn't have to pay any taxes and then you and i can donate $600 which we can writeoff and all church members just happen to get an ipad. >> i'm all in favor. let's turn it into a religion. >> i agree here. i think we need to unify tax rates across the world. >> right. >> so companies and individuals don't arbitrage the rates. >> they still will. >> let's move on to the jobs number on friday. it may end up being the big headline of the week. almost certainly will be. already some on wall street are raising a red flag. goldman says the number could be as low as 125,000. what's the job picture like in california, jane? >> well, it's not good. by the way, that goldman thing blames the weather, again, can we stop blaming the weather? i want to make this a weather free blame zone. the unemployment rate in
california remains at 11%. much higher than the national average. but ucla anderson forecast says part of the reason for the disparity is that fewer californians have given up on the job market. they're still in there trying. that's one reason why their jobless rate is much higher. >> this 125,000 jobs is worst case scenario and now 2% gdp. 2% gdp means the fed won't do anything. it's not strong or weak enough, but it's not strong enough to get any real job growth here. so 1% gdp would be great because the fed will step in, 3% would be job growth, but, tyler, 2% gdp means languishing. >> absolutely a slowdown from where we were in just the first quarter of the year. let's talk about new york city taxi cabs getting a makeover and going green. not necessarily in the ecological sense. 18,000 cabs that serve the outer bor rows changing colors and the way they run. you can get to go in and have it
painted what is known as apple green. >> this is about keeping track of these cabs, tyler. you know this. you're a new yorker. you drive around new york and try to get a delivery cab, you can't do that. keeping them green means that the cab people can keep an eye on them and make sure they're not picking up people in midtown. i think this is more than going green. >> i think it was all because when jane came driving through in her big black lincoln town car, people were hailing her. >> this is the thing. quit this ma'am by pam by stuff. when i go to new york, i want to be treated rudely by the cab drivers. this whole bit of emasculating new york, you've lost your rudeness edge to new jersey. >> we have to bring back the checker. >> you know, they could go condo those old checkers. they're own zip codes. >> thanks, guys. up next on power, can the dow stay relevant? it's the cover story in this
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reset the markets for you. the dow jones industrial average has really been down all session. there's a lot of caution in this market. we have a couple of big reports this week. of course the jobs report on friday. but the big ism report tomorrow and that's what the market is going to be watching because we have had several manufacturing districts across the country report less than expected growth in their particular areas. the nasdaq is down about two-thirds of a point. and the s&p 500 is off half a point. the yield on the 10-year note is way back down. we haven't seen that since about march. 1.914% on the 10-year. ty. >> you know, sue, i'm looking at the dow industrials and one of our research notes said if the dow closes where it is, it will be a loss for the month, it would be the first time we've had a negative april since i believe it was 2006. and when that happens, when you have a negative april, you typically go onto a negative second quarter. let's look, jeff kilburg rejoins us, sue, at that story that ran
in barrens over the weekend about the relevance of the dow and whether it's larded up with companies that really don't deserve to be in sort of the leading market barometer. so we went and looked at it and decided three -- speaking of lard, i think the company that ought to be out is kraft. i say cut the velveeta and give me amazon. there are only two retailers in the dow, jeff kilburg, home depot and walmart. i say let's get into the digital age and bring amazon in here. get rid of kraft. >> i agree with you. i would also like to see bank of america get exited. if you take the merrill lynch component, strip that out of there, that's like 70% of earnings. bank of america is on its way out or asked to leave shortly. >> and wrou bring in apple. >> i have to bring in apple. if you're trading treasuries in london or hedging your soybean crop in winterset, iowa, everybody looks at their price. >> sue, what would you kick out? >> trars