tv Power Lunch CNBC November 13, 2013 1:00pm-2:01pm EST
murphy won the debate. final trades. pete. >> kfn. >> stef. >> red hat. >> murph. >> wfm. >> josh. >> pfe. >> my final trade. >> hebe. >> "power lunch" starts right now. >> strong buy. >> "halftime" is over. the second half of your trading day begins now. >> thanks very much, scott. and the guys and girls over there. several stocks at the nasdaq are now in bear market territory. we will name the names. and ask and answer whether you should get in or wait before you hit the buy. but that bear looks sick i would say. goldman sachs making big changes naming the next generation of managing directors mds. a big day there. what's their take on the market? and a new argument breaks out. is your mutual fund too big to
fail and if it is, should you leave your money there or not? s there's a big discussion, sue, about whether some of the big asset managers are systemically important, ie, too big to fail. >> indeed. that's been a discussion recently, ty. we'll talk about that. we also are talking ate the nasdaq, pushing higher today, but it's had a few lack laster days recently. so questions are being raised about whether the tech heavy index is setting up for a bigger pullback. the nasdaq is, however, still up 36% in a year and that's nothing to shake a stick at. and since that march 2009 bottom the index is up 210%. so should we cue the bear video? perhaps. because it's cold. we picked polar bears today. aren't they cute? a number of stocks at the nasdaq already in bear market territory. what does that mean for all the other stocks there? sheila dharmarajan is bear hunting at the nasdaq. hey, sheila. >> hey there, sue.
the nasdaq is staging a little rally today, but when it comes to the tech heavy index traders tell me we are over bought, over stretched and trading at thin levels. so could this mean there is a bigger pullback in store? well, we decided to go bear hunting and see which nasdaq stocks are already in pullback mode and which are pretty close. so based on yesterday's close looking at the nasdaq 100, ten stocks are officially in bear market territory. that means they're off more than 20% since their recent highs. we do have some high-flying names on that list like tesla, green mountain coffee, intuitive surgical. another five names at the nasdaq 100 close, big names like facebook, down about 16%, monster beverages and akamai. the aggregate about a third of the nasdaq 100 stocks are in correction mode. that means they are down more than 10% since hitting their highs. so the big picture, what does this mean? are we going to see more of this bear hunting happen?
traders tell me look, will are signs it the they are watching closely. also, a lot of the technicals like advancers and decliners haven't been on the nasdaq side. what is on the nasdaq side, seasonality. everyone has been talking about the santa claus rally lately. nasdaq has been a beneficiary of that. the stock traders almanac tell us since 1980, about 77% of the time the nasdaq has staged a rally when it comes to the last trading days of december. maybe that's working in the nasdaq's favor right now but, of course, we are all on the hunt for those bears. sue? >> all right. thank you so much, sheila. now to the dow and the s&p 500. if both of those indices close down today and the dow is off about 4 points it would be the first back-to-back loss this month. what's ahead? let's bring in bob pisani and kenny pull carry director with o'neill's security and cnbc corrector. sheila highlighted the names but tesla is up huge for the year as
a whole. >> right. you have to take that in stride. it might be off 30%, but it's up how much? i mean is it still up 70% on the year. is it really in bear market territory. you know. >> given the range it's at. >> certainly it's in bear market territory if you take it just from its high but overall it's been certainly a good performer for the year. >> all the top stocks you mentioned are high names, they've moved much more than the market. the market up 1%, they're up 2%. >> those are the names that suffer when people start to want to take money off the table. they're the outliers. >> those stocks are up today. those high beta nasdaq names. >> they're kind of plateaus. >> right. >> the yelps of the world and linkedin of the world. >> what do you make of the market today? >> i think it's more of the same. stuck in the fed speak, are they or aren't they. the market remains confused. in a tight range, 1740, 1775 is where we're going to be until you get more clarity and we're not getting any clarity on any given day.
>> look at the market here. i made this point earlier. narrow range, traders sitting on the hands, light volume but all year when you move sideways for three or four days, the market tends to move up rather than down. >> right. >> in other words everybody can't figure out what to do and it drifts upwards. look at the last half hour. >> but it goes on low volume so what that tells you it's more proprietary trading versus the big asset managers making any changes in portfolio. >> exactly. getting towards the end of the year so they want to be very careful they've had a good year. >> thanks, guys. appreciate it very much. lots of news in the retail sector to tell you about. macy's hitting a record high today. as third quarter comp sales rose better than expected 3.5%. more advertising brought in more business. macy's right now is traded up just under 10% to the plus side. different story for perry ellis the clothing designer cut earnings and revenue forecast for the third quarter and year due to reductions in its private label business.
that stock is down 22%. lululemon gaining ground up about 4.3% after jpmorgan chase began coverage of the maker with an overweight rating saying lieu lieu lemon with accelerating growth in top and bottom lines, follows last year's execution issues. up to you. >> thank you very much. drill down a little bit on macy's and the outlook for holiday retail with cnbc's retail analyst stacy widlet. good as always to see you. >> hi, ty. >> you were one of the people let the record show who was very strongly bullish on macy's. you must feel good about it now. it's trading at an all-time high. do you still love it? >> i do. here's the deal, tyler. coming out of q2 everybody thought retail was the end of the world. traffic hit a wall. so that was the opportunity to buy great names. macy's came out today, their comps were better than expected, they're talking about strength across the board in geographies,
across the quarter, and october being the best month. so that's a great indication here, certainly as we look into holiday for certain names, not for everybody. >> let's turn to another certain name which i think comes out tomorrow with its earnings nordstrom. does this macy's report auger well for it. >> nordstrom is one of the places you shop. nordstrom has the advantage of they have the rack which is the off-price part of the company, so think tgx how well that's been doing and also a lot of elements that macy's is doing right whether that's omni channel, localization, whether that's upgrading their staff. i think, you know, macy's is a good indication of best companies that will come out on top this holiday season and i think nordstrom falls into that category as well. >> that's a very interesting way. we have to leave it there. that's an interesting way to think about it. go for the best in breed and you rarely go wrong.
stacy, thank you very much. >> good to see you. >> to kate kelly with breaking news on another retailer. kate? >> tyler, thanks so much. we have breaking news on crocs, the shoe maker apparently under way with discussions with at least a couple of private equity firms about a possible leveraged buyout, privatization of the company worth a little more than a billion dollars in market cap. these talks have been going on about two months, and parties that have been in discussions with them include kkr and blackstone two of the big players. i'm told kkr is more than likely out of the game at this point, although blackstone is still considering the possibility of a deal. however, talks i'm told are fizzling a little bit in general. it's not clear whether things will come together or not. but the stock has clearly been reacting very, very well to this news today up by double digits at one point earlier. now a ril bit off those highs. still very strong, tyler. that's one we'll continue watching for you. >> it's up 7% now. as you mentioned, kate, off the highs but a decent percentage
gain. thanks, kate. a number of ipos begin trading today and dominic chu is tracking them all for us. hi. >> on ipo watch. so no, these aren't twitter, right, but still joining the fraternity of publicly traded companies. kick it off on a bullish note. extended stay america surging in their debut. the hotel and lodging chain up around 15% off their session highs. on the slightly more bearish side of things, we've got diana gas lng partners liquified natural gas shipping company down around 2% to 3% in trading. the company sold about 12.5 million of the partner units at 18 bucks apiece. the most bearish of the ipo trades today is chegg. the educational products company priced 15 million shares at 12.5 apiece. they rent textbooks, provide on-line resources for students for things like scholarships and course reviews but those shares not appetizing for investors
today. >> meanwhile, president obama's technology chief getting grilled on capitol hill today over all the problems plaguing that health care exchange website. talk about laying an egg. eamon javers live in washington. >> hi, tyler. it's been a tough hearing up here on capitol hill for the obama administration officials here testifying, testy at times within the committee hearing room. members of congress fighting about who gets to ask which question, who's insulted who's staff. but one of the key questions they keep coming back to over and over again is exactly how long is it going to take to fix healthcare.gov and will the administration be able to hit the november 30th deadline it has publicly set for itself. the administration officials haven't been able to give a good answer to that question today. take a listen to things exchange. >> are we going to hit november 30th? >> thank you for the question. thank you for your kind words at the beginning as well. so the goal that has been laid out is for the site not to be
perfect by the end of november -- >> functional, people can log on? >> so that vast majority of americans will be able to use the site smoothly. that's the goal we're gunning for and working very hard to get there. >> that's about what they've said. is that the goal we're working hard to get there, but no guarantees here today from the white house folks that healthcare.gov will be up and running by november 30th. >> sounds like blanket promises or guaranteed is probably not the way to go. >> especially in this very complicated it technical situation. maybe it was a mistake to put that out there in the first place. the woman who was the face of obama care, remember her, it was her picture on the healthcare.gov website, she was on "good morning america" on abc. abc news says her first name is adriana. we don't know her last name. and this is the first time the country has heard from her and she was not happy. >> we signed the release that
said it was possibly going to be used for material for promoting the health care, which i didn't know it was going to have a negative impact. >> dubbed glitch girl, the most despised face on the planet. did you ever anticipate this type of publicity, scrutiny? >> no. it's bullying. >> it is bullying. >> but at the same time, you know, i thought i had to do this for my child. i'm here to stand up for myself and defend myself. >> according to abc news, adriana is not a u.s. citizen, interestingly, but is eligible for obama care because of her permanent residency status. she says she was not paid for the picture by the government. cnbc.com's dan mangan is here now. what can you tell us about this interesting woman who is understandably quite upset with what has happened. >> very upset, the face of the
failure of healthcare.gov and this is kind of a sad or funny story depending on your perspective. she wanted to get free family photos and contacted somebody she knew and said can you take these photos. great with. we'll use this picture on healthcare.gov. >> signed a release allowing them to use her image or likeness as the front page of obama care. >> right. there is no free lunch and no free photos when it comes to healthcare.gov. suffer the consequences. >> what is she likely to do? is there any talk of a lauts here? i assume there isn't? >> i don't think she has any recourse at all and i think she's -- she got her five seconds of fame this morning at abc. the bigger problems, the face of healthcare.gov they're showing low levels of enrollment, less than 50,000 people have signed year to date combine that with the state exchanges, less than 100,000 people in october where the goal was five times that, 500,000 people.
>> i have a sneaky feeling for all the upset this young lady has faced this is going to end well for her. people see that publicity and feel sympathy for her predicament and i bet it turns out better than she might think. >> thank you. >> sue, down to you. >> thanks, ty. goldman sachs employees sweating bullets. many bankers find out today if they've made the cut to managing director. is a career make or break moment, sure is. we have the details and what goldman's latest moves means for wall street pay. plus, it may be the future of breakfast. it's a power pitch you've got it see.
welcome back to "power lunch." shares of independent oil and gas company qep resources moving towards session highs an drifting off here. the company one of geana partners. they sent a letter asking the company to form an independent committee to study a spinoff of the popline business. janna is the largest shareholder. keep an eye on those shares. >> thank you very much. time for the "power lunch" countdown. a lot of nail biting and sweating at goldman sachs today. i guess more than just normal there. hundreds of mid-level bankers at the firm will find out if they made the cut to be named a managing director. mary thompson and kate kelly join us. what can you tell us about the presumptive class of new mds at
gs? >> the formal announcement made. 280 of them, slightly larger tha than last year's class of 266. most about 200 in revenue producing roles, shouldn't be a surprise, things like trading, investment banking, et cetera. coming into this year a lot of question about how big this class would be because it's the last year that they're going to be named on an annual basis. from this year on they're going to be named every other year. so some people were thinking they're going to name more, but keep in mind, goldman has been in a cost cutting mode and keeping compensation costs in line is one of the easiest ways. >> 280 new mds. where's the party tonight. what does this say about the overall trend of pay and promotion on wall street? >> it's interesting. we're seeing a slight -- a modest up performance in terms of paid projections this year, up 4% is the main projectionion overall for wall street bonuses globally. that's overseas banks as well. a couple of points, things i would point you to in fixed
income, a tough group this year, pay is expected to be down about 10%. on the equity side, unsurprising in light of this rally, projections up 12%. in other areas like wealth management, for example, we're seeing modest upswing projections. a mixed bag actually more positive than not and as you said, mary, i think it's all about revenue production and sort of pay per performance. >> that was going to be my question. is the take away it's pay per performance. equities do well so if you're in equities you do well. bonds and other fixed income haven't done so well. >> it's been a trend. after the financial crisis, i think wall street took a good hard look at compensation and said we're not going to pay the mediocre performers for doing a mediocre performance. those who do well will be paid very well. >> if you unbundle the numbers in wealth management and prime brokerage which caters to hedge it funds, well healed client who is do a lot of business and good
margins attached to them, less about the prop trading that's been rooted out by the volcker rule. do you have a client base that will buy your services, get lucky with a big deal. if not -- >> or money maker. >> that's right. folks, thanks. >> sue, down to you. >> thank you all very much. the housing now, the number of people applying for mortgages slipping. rates on loans have jumped to their highest level in a month. mortgage applications falling almost 2% last week. what do the nation's biggest home builders think about the health of the housing market right now? diana olick speaking with pulte's ceo just a short while ago. she's here at post nine. good to see you as always. >> you're right. rising mortgage rates are not the only thing playing against the big builders right now as sue said, we have the exclusive opportunity to interview the ceo of pulte homes, one of the nation's largest builders to get his take on why we're seeing this pause in the housing recovery. >> the pause has been caused by
rapidly rising rates a few months ago, the government shutdown, i don't think helped anything, and then concerns around affordability as home prices have risen quite a bit. we are still far below long-term averages. i had think we need good job growth in the country to really help the housing market over the long run. >> second in size only to dr horton pulte operates in several categories acquiring entry-level syntex during the recession but now focusing on the move up and higher-end homes in their pulte and active adult dell web divisions. he admits demand is slow for entry level and that's why pulte is focusing on those higher end homes. >> i think you're going to have to adjust in our case the overall portfolio in order to take advantage of that and perhaps the entry level is not 40 or 50% of overall market like it used to be. maybe it settles in at 35% or 30%. i don't know exactly. and by no means is that market
dead. it's a question of how robust is it. meantime our job is to invest where we can get the best returns and right now we're seeing that in the move up and active adult category. >> pulte's entry level pitted against the single family rental market which he said he thinks is a long-term place so interesting because some people think that it's going to be a quick gain. he says it's going to be long-term competition for the builders. >> great interview, fascinating to hear from him. good to have you at post nine. >> fun. >> come up more often. ty, up to you. >> thank you very much, sue. the big banks too big to fail but what about mutual fund giants like fidelity and vanguard and others, what's at stake in this debate. is this the future of breakfast? >> coming up, an egg-citing edition of power pitch. the scientists have hatched a recipe for the egg and it doesn't involve chickens. stay tuned to see the pitch and decide if you're in or out.
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to become the next big thing. >> i'm mandy durry. we have a company that is serving up lots of eggs but does not need a single chicken to do it. josh is the ceo and founder of a food technology company called hampton creek foods. before whipping up faux eggs he was a full grad scholar who spent seven years working with poor communities in africa. this is his power pitch. >> my name is josh tetrick. i'm the ceo and founder of hampton creek, a food technology company selected by bill gates as one of three companies shaping the future of our food. the future really that needs to be shaped which is the system of food is incredibly broken. i think the best manny fetation of this brokeness is global exproduction. 1.8 trillion eggs are laid around the world and this system
is defined by radical inefficiency, rising prices, animal abuse by environmental degradation. what we do as a company is take all of that nonsense entirely out of the equation and replace it with a plant that is 18% less expensive. we sel that plant based ingredients to general mills and kraft and heinz and the power of that plant to make products like a cholesterol-free mayo called just mayo and cookie dough you can actually eat. >> josh is on the right side of your screen. he can hear us but he can't react just yet. so on our power pitch panel we have alan of "new york" magazine food blog street he attended a french institute and worked at gourmet and the food network magazine and likes his eggs poached. executive chef shawn, his newest endeavor, juneny in new york city which made esquire's best restaurants 2013 list.
the chef likes his eggs poached as well. let's get cracking on hampton creek food. what's your reaction to the power pitch? >> they're using it to make products. anything is going to taste good in a cookie. i'm excited to see how it works on its own as an ingredient. >> what about you chef, shawn? >> i'm interested to see the quality of the product when it comes out to see if it tastes the same as what they're promising. >> how does he get critical mass, move to be a product that has a lot of clients and a lot of exposure moves beyond just being a boutique product. let's give one of the eggless cookies a taste. have a bite and see what we think. >> it's pretty good actually, i must admit. i don't think it's the best but it's good. >> are you surprised, alan. >> not the best cookie i've had. it's a decent cookie, though. >> josh, time to get fried so to speak. alan, first question to you. >> i want to know how he's going to get nonvegans excited about this. >> the big answer to that question is, creating really good affordable food. i think if we do that, lots of people will come along for the ride. >> you know, is had this a
sustainable product and going to be good for health in the future? >> we are not trying to go after free range or barn eggs or backyard chickens. this is attack an industrial system that i don't think meets our values. the benefit we have is we can do it at a price that is more affordable than the status quo. >> how do you gain traction enough to be beyond just being a boutiq boutique niche product? >> we have a deal with a fortune 500 company whole foods, we're collaborating with three fortune 500 food manufacturers. >> you raise an interesting point because you're saying it's cost effective which obviously industrial food companies will be excited about, but consumers might not be excited about the fact it's a fake egg cheaper than a real egg. >> you don't buy mayonnaise because you, you know, love to have the egg in the mayonnaise. you like a creamy mayonnaise. that's one part of our business. that mayonnaise that is in front of you there is beating hellmann's in taste tests 53% of the tile and a reason people say
they like it because the taste pops. >> how do you think you're going to overcome, you know, decades and obviously, you know, all these marketing techniques with hellmann's and companies that are -- have pretty much instilled the quality of their products since a childhood memory. >> we don't talk about eggless mayonnaise. we talk about mayonnaises that tastes well. we win by appealing to people like my dad, probably shopping at piggly wiggly in birmingham, alabama, right now. >> what's your monthly revenue? >> i can't disclose that up to this point right now, but i can tell you that when you have a national distribution deal with a fortune 500 company, that things are looking pretty positive for a young company that is i think on the cusp of doing some pretty incredible things in food. >> you heard what josh had to say. are you in or are you out on joshua's eggless eggs. alan, you first. >> i'm not particularly sold on the idea of the artificial egg using kind of molecular to turn into mayonnaise but i think a
lot of food companies will be excited about it so i'm in. >> what about you chef shawn? >> from my perspective auto i'm out because i feel as though, you know, you can't substitute something like an egg. you can't substitute something nature has given to you. >> i'm going to see if i've done something i'm not sure done on power pitch. this is not synthetic engineering. it's a natural type of yellow grown by farmers. >> does that change your mind, shawn? >> i'm still out. >> bottom line it tastes really good. i don't care whether there are eggs in it or not, all i care about something whether i would eat or feed my children and i'm in on that front. josh, what's your reaction? >> you know what, i think i could take that and hold my head high and shawn, i encourage you to visit your local whole foods and maybe we can turn you around by just getting in your mouth. >> thanks so much to josh of hampton creek and also our panelists alan and chef shawn for an excellent power pitch.
. >> are you in or out on hampton creek? logon to power pitch.cnbc.com and leave a comment or go on twitter and follow the conversation with the #powerpitch. sue? >> hey, i think it's great. my son is allergic to eggs. that could be a fantastic alt alternati alternative. i think there's a niche in allergies. thanks, ty. to gold. gold prices are closing right now and sharon epperson is tracking the action for us over at the nymex. >> hi, sue. it's become a familiar pattern gold prices rallying during the session and into the close giving up those gains. that happened today. we're looking at gold below 12 0 an ounce, down about $3 as the final trades come in right now. we are looking at copper prices that have really been the big decliner here in the methals market. copper hitting a three month low. talking about the tapering talk and what we heard or the details we didn't get out of the china summit about its economic plan for the next decade. those are factors weighing on
copper but we're looking at metals weak across the board. back to you. >> thank you so much, sharon. all right. let's check the bond market as you know, we did have a ten-year note auction this morning. we basically had $24 billion worth of ten-year notes go off the board. the bid to cover, was better than the -- what we saw in october. we came in at 2.70% on the bid to cover and that is better than what we saw in the october auction. right now, we have the yield on the ten-year note at 2.73%. so the yield holding steady at 2.73% and you're up to date on how the bond market is performing. up to you. >> all right, sue. the big banks are too big to fail but what about the mutual fund giants? fidelity, blackrock and vanguard. what did you find, kayla? >> the hottest debate in washington right now. a controversial on that question came out last month. you can imagine the industry is not happen. we'll tell you what happens next up on "power lunch."
welcome back to "power lunch." check out canadian solar, posting its first profit in nine quarters had helped along by improvement in its solar power plant business. profits and sales beat analyst estimates and shares are up around 10, 12% in trading today and get this, up 1500% from their 52-week low of $1.90 on november 15th. big moves for canadian solar. >> thank you very much. the big banks have been deemed too big to fail but are asset managers like black rock and fidelity too big to fail? a big controversy in washington right now. what are the details some. >> one of the most heated debates stems from the f sock a consortium of regulators that meets about once a month with representatives from big agencies like the fed, treasury, the cfpb, s.e.c., we could keep going but about two weeks ago the group discussed whether asset managers should be deemed too big to fail, my sources say
blackrock and fidelity. this designation called systemically important and requires steep capital levels and tight regulation. companies are fighting it. two dozen plus letters responding to a controversial october report from the office of financial research saying reaching for yield and hurting into asset classes put these companies at risk in volatile times. several trade organizations say the study ignores the way asset management works, others like invesco says history shows these firms don't play a role in financial crises. losses to the client not taxpayer. regulate them at the product level, not at the firm level. shouldn't have to hold capital against plain vanilla stock and bond funds. most say, we're smaller than the banks. blackrock at $3.8 trillion is the biggest money manager showing its balance sheet only $8.7 billion, a far cry from deposit taking institutions like jpmorgan and bank of america.
regulators say it's early days. the fight is just beginning but you have to imagine this cost will be passed down to the customer if they have to hold money up against stock and bond funds. >> blackrock is in a mercury in a solar system of jupiter and saturns. >> $3.8 trillion under management. $53 trillion. it is big -- >> your and my money not their money. >> exactly. we get that back in times of a cris crisis. >> or less of it back in times of a crisis. >> exactly. sue, down to you. >> ty, cisco systems getting ready to report earnings after the bell today. ceo john chambers' pay has doubled over the past year. the stock is up during that time. if you go to a longer length time, it's not quite as impressive a performance. raising the question, is mr. chambers worth it? josh lipton in san jose with a look at that question. >> hey, sue. there is no ceo more closely linked to his company than john chambers is with cisco but he
has reportedly indicated he could step aside as ceo as soon as next year. the question for cisco investors has he been worth it? he joined cisco remember in '91, became president and ceo in '95, named chairman of the board in addition to his ceo role in 2006. chambers has enjoyed the perks of the sweet life. his total annual compensation almost doubled to $21 million and 2013 he billed cisco $2.8 million in jet expenses. for performance cisco stock has climbed some 20% this year, over the long term, though, it's more mixed picture and in the past ten years that stock is up just about 6%. but since january 1995, when chambers became ceo it's up some 1200%, way more than the major indexes and he has grown the company from $1.2 billion in annual revenue to $48.6 billion. chambers, of course, would like to leave on a high note. the question is, how bright is cisco's future. analysts say the cloud is an
obvious threat but that cisco is making moves to adapt its portfolio and the tech bellwether has the potential to return more to shareholders. back to you. >> josh, thank you. and mr. chambers, the ceo of cisco, will be on "closing bell" today to discuss the company's latest earnings and also give us the outlook for cisco. ty, up to you. >> do you want to invest like a billionaire? might have a chance but should you, robert frank? >> sounds like the latest get rich scheme, invest like warren buffett, carl icahn and dan loeb and get rich too. crazy right? we'll show you a chart that may just change your mind coming up after the break. get paid to do somethingpled you really love, what would you do?" ♪ [ woman ] i'd be a writer. [ man ] i'd be a baker. [ woman ] i wanna be a pie maker. [ man ] i wanna be a pilot. [ woman ] i'd be an architect. what if i told you someone could pay you and what if that person were you? ♪ when you think about it, isn't that what retirement should be,
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and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all medical conditions and medications. serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting and increase in psa. ask your doctor about axiron. coming up on "street signs" the top of this hour pimcos's bill gross tweeted markets are beginning to resemble a casino. we'll have him on the show to elaborate and housing price gains slowing down. healthy or worrisome? going to weigh in. a stand-up performer this month
on the dow, that no one has been talking about. we're going to as well. all those things and lots more coming up top of the hour, "street signs" is the name of the game. back over to dominic chu with a market flash. dom? >> thank you so much, mandy. check out what's happening with facebook surging to a session high right now. this on dow jones reports that facebook offered to buy snapchat, photo messaging service valuing the company at $3 billion and was spurnds by senate chat. tyler, back to you. >> thank you very much. the ibillionaire index, i got off an icarly, could give investors to trade like warren buffett and carl icahn. should you do it? wealth editor robert frank joins us now. >> tyler, billionaires are the smart money, right? in theory you should be able to get rich buying the same stocks they buy. ibillionaire and the new york stock exchange launched the ibilen air index, tracks the 30 large cap equities which
investors have allocated the most funds. the list includes carl icahn, david tepper, paulson, loeb, lots of our favorites on cnbc. the billionaire index has outperformed the s&p. check this out at least over certain periods. since 2005 it's posted average returns of 12.5%, compared to the s&p of 7%. huge difference there. now ibillionaire is planning to launch an etf based on the billionaires. you can't invest but that's coming soon. by basically becoming rich like invest vesting like the rich may not be so simple. the holdings based on 13 fs, notoriously backward looking and they have hedging strategies, options and risk tolerance different from the average investor and they always have better information. for those who want to vicariously invest like a billionaire without putting their money in can buy the ibillionaire app, that's only 99 cents. >> that's more my speed because i've always felt like the first billion is the hardest. >> yes. >> you can lose 99 cents and
feel okay. >> sue, you got some more for us. >> yeah, i do. listen, i want to be able to experience that first billion. all right. robert, stay with us because we're going to talk art. christie's new york hosted the highest grossing auction of all time last night. with an art sale netting $691.6 million. smashing records basically right and left. we just saw a picture of the francis bacon again. the most expensive artwork sold at suction, first time it's been put together as a triptick at auction. the price $142.4 million. no word on the seller or the buyer yet. word has it steve wynn might have been one of the bidders. the record for the most expensive work sold by a living artist also shattered last night, jeff koounz balloon dog went for $58 million sold by peter brant to a unknown buyer. here's a great view from inside what was a packed room last night. taken by one of our "power
lunch" producers. you know, robert, you just got to wonder with numbers like that being bandied about, i mean we've talked before about whether or not the contemporary art market is in a bubble. what's your perspective on that? >> we've been talking about a bubble in the art market for at least four years and it goes higher. i think it's going to keep going higher not because of really the quality of art getting better but people, especially the wealthy, want a safe place to put their wealth so like many collectibles art is going to keep going up. >> that balloon dog may be great but it messes up the lawn. you have to clean it up after it. what about sotheby's they have an auction and what's on the block and could we see these epic prices? >> tonight interestingly is all about warhol. it's -- we've got the silver car crash painting, one of the biggest and oldest warhol paintings saying it could go up to $80 million. this could go well over 80. it's going to be warhol versus
bacon and then we have steve cohen selling his liz warhol that liz taylor profile that's going to be a huge piece as well and then we have a barnett newman, selling that blockbuster in the spring for $43 million. this has two lines on it. look at that. two lines. it's twice as good. as the other barnett. >> the other only had one line. pay more for that. >> two blue lines. so this could also -- >> think what he could have got if he put three. >> so again, tomorrow morning, we'll get ready and see more big numbers. >> thank you very much. sue, let's go to yahoo!'s finance question of the day. you answered this poll, francis bacon, never met a bacon i didn't like, sold for $142 million last night. is that right. >> that's right. >> is the art market in a bubble? yes, 42%, no 11%. and 48%, this would include you and me, i stay away from art as an investment. >> well, probably because we just don't have the budget. all right. guys, thank youp. test tesla's founder elon
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all right. power run jun time. joining us kayla tausche, bob pisani. microsoft apparently ditching its long-standing employee ranking system, eliminating its practice of evaluating employees on a bell curve in an effort to foster more teamwork and collaboration. when you do it the way they've been doing it, kayla, there's always got to be a loser and always got to be a winner. >> that's right. of course this is probably bad news for those people who are very comfortable being in the middle 68% of that bell curve who knew they did just enough to get by, but good for employee moreral to bump up the system to a modern day approach and reward people when they do a reward. >> talk about teamwork, promoting teamwork, ten people on your team and two you flunk, two say spectacular and the rest mediocre. i'm glad they got rid of it. >> tesla's elon musk making interesting comments to andrew ross sorkin yesterday. let's take a listen.
>> if i would have another company in the future, which i would not be any time soon, the -- i think that would be a thing to do, is to do an electric aircraft. >> you want to do an electric aircraft? >> yeah. supersonic and vertical takeoff and landing work well with electric. >> very interesting concept here. i wouldn't bet against him in many ways. he's had such amazing breakthroughs. he's one of the most interesting men in the world if that guy on the ad isn't. bob pisani, what do you think? electric plane a good idea? >> look, being able to take off and land without a long runway vertically that's been one of the goals of aviation for 100 years essentially. i think the problem is, the guy has his hands full. with space x he's working on, working on private flights to mars, also that little thing called tesla and he was also talking about the hyper loop yesterday. i think he had hwants to promot
between los angeles and san francisco, but i think his hands are full right now. >> i'm not an engineer, but seems like you would have to generate so much power and heck, the history of some of these lithium ion batteries has not been all that comforting to flyers or drivers. >> no. those batteries not comforting at all. some fortuitous timing to announce this idea or put forward this idea after this string of news tesla it itself has had in recent days. i don't really feel comfortable with it quite yet but the guy has shown he has a good record. >> we don't have to worry about it for a while. bank branches are shrinking as more consumers make the move to mobile banking. is there any debate, kayla, this is the future of banking? i am stunned that banks still have so many walk-in branches. >> it's funny but when you have a really complex problem, tyler, there's no place you would rather go than to speak with a person face to face. we heard from brian moynihan and
tim sloan and they said the branch isn't going away. it might get smaller and be the size of your dry cleaners rather than the size of some big expansive retail space but it's not going to go away because people are still going to have customer service issues that can only be solved there. >> put enough starch in my shirts i'll keep going there. always struck by how vast some of their real estate holdings are. >> a bit of an illusion. 1970, 22,000 bank branches nationwide today 90,000, four times as many. it's a bit of an illusion. shrinking over a few years ago bought because as kayla points out, atms you can deposit and withdraw money. that's the main reason people go to banks. they're not going to go away. you'll be able to find a bank -- >> i have an app, take a picture of my check, deposit electronically. >> and they thank you for that. >> i bet they do. wall street comp may be increasing this year. a report from the financial recruiting firm options group sees average global comp rising 12% in equities, but
commodities, currencies and big credit among the losers. we talked about this earlier. this is the way it seems to be going. if you do well as equities have you're going to get paid for it. >> i'm sorry. i have a lot of friends who work in the compensation in these areas and they might make it a little more this year but their compensation has been shrinking a number of years, four or five years previous and a lot of these guys, particularly analysts, making a fraction of what they were making ten years ago. wall street is not, you know, doing spectacular. >> kayla, what's the buzz you're hearing? >> financial advisors, wealth management the place to be. clients assets are going up, investment banking and some of the trading places that you were mentioning, really volatile, hasn't been a good year for trading but i think generally at the banks compensation is going down but revenues are going down. the key number fraction of rev knew could go up. >> all right. >> thanks very much. s&p 500, 1775. could it close at 1776? all-time highs. we're back in two.
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that so that is a new high for the s&p 500. we'll see whether or not it holds that going into the close. one of the contributors to that is macy's, the biggest winner in the s&p 500. up just about 10%, ty. >> all right. sue, thank you very much. that will do it for this edition of "power lunch." >> "street signs" begins now. ♪ >> it may feel like going in through the outdoor for likely incoming fed head janet yellen. we'll ask bill gross if he thinks the fed can pull off a perfect exit from qe or if the fed may end up looking like a fool in the rain. other hot topics the stock that has quietly been doing great, the ten cities where homes are the most over and undervalued right now. the one market that may have