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tv   Street Signs  CNBC  May 1, 2014 2:00pm-3:01pm EDT

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but the nasdaq and the transports are doing quite well today. the ten-year note, the yield is 2.95%. that's the low of the day for the ten-year yield. >> that yield is surprising to me. that will do it for "power lunch." >> see you tomorrow. "street signs" begins now. starting to be a bit of a volatile day. in fact, we've got the jobs number tomorrow, and the dow is down about 50 points. the economy is starting to tell us something perhaps wicked this way comes. hi, all. we hit a record high earlier but maybe getting nervous playbook ahead. the one market sector that is looking like dark clouds, and mandy, everything that you wanted to know about housing but were no doubt too afraid to ask. let's take a look at those markets once again, shall we? we're slightly lower on the dow and s&p, but that was after the dow closed at an all-time high yesterday. folks, it's not really stocks people are talking about. it is the persistent bid we are
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seeing in treasuries. despite the continued taper. what gives? our market reporters are in place to give us answers hopefully. rick santelli in chicago, bob pisani at the nyse. rick, why are yields pushing down and what does it all say about expectations for the payrolls tomorrow? >> reporter: first of all, mandy, think about every guest you've had on that talked about treasuries in the last four months. pretty much they've all been talking about higher rates. some of them even talk as if this year has had higher rates. but it hasn't. lots of short covering. "a." "b," technical levels, we'd be looking at fresh low yields for 10s, already happened for 30s, we're going back to june. i think that's triggered activity. there's an even simpler answer. it's the first day of a new month. a big holiday today. monday it's a holiday in london. i think that's helping drive short covering in treasuries. >> as we can see, the ten-year is below the 2.6% mark.
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let's send it over to bob pisani at the nyse. a bit of a choppy day. currently to the losing end. >> and the thnasdaq has been trending down. not happy to see that. although we see things on the upside. social media having a very good day. yelp, another great top line. look add linkedin. we'll get earnings after the bell. that stock drawing huge times normal volume. also twitter finally on an up day right now. online travel agents also having a pretty good day. expedia earnings we're expecting. tonight, up 2.8%. trip adviser and priceline on the upside. something that's a little disappointing, big oil. exxon, conoco phillips. look at this, down. they had fantastic reports today. and their reports haven't been very good. exxon's trading down today. these companies have a very tough time growing. and that's the biggest problem. they're value stocks because they can't get any oil out
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there. 4 million barrels a day, mandy, exxon produces. that's about 5% of the world's supply. and you know what? they lose about 5% to 8% of it a year. they have to replace it and they're having a hard time finding a replacement. who would have thought, value stocks for years and nobody's still very interested in them. back to you. >> who would have thought indeed. thank you very much, bob. >> in fact, not a lot of oil stocks at all higher today. with the exception of lynn energy, two of those are pipelines, by the way, everything else is down. all right. bob, thank you. well, you heard kate kelly bring you the news in "power lunch." hedge fund manager dan loeb saying things are starting to look a little bubbly, and it is going to be a stock picker's market more and more going forward. with that in mind, what are the best bets for your money? let's bring in chief market analyst at loomis sales and robert, chief investment officer. robert, let's start with you because last week, we were actually kind of bashing barbie, but with that in mind, you like mattel. how come?
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>> you know, i do, brian. i think barbie and mattel and american girl and the whole franchise they have over there, you know, has really gotten beaten up quite a bit. the stock's down about 20%. but when you look at the forward earnings on the stock, it's trading at about 13 versus 15 points. the dividend yield as we're talking about the ten-year treasury going back below 2.7% is about 4% right now. so you're paid to wait on the stock. and i think the valuations on the company gives you some time to kind of ride it out. it's a stock we'd be buying on this pullback. >> robert, the fact that we started off by asking you about an individual stock really begs the question whether we've moved into a period where you can no longer just move your positions based on a benchmark. you really have to knuckle down into individual being sos because we're at record highs. and i'm not sure whether there's any more easy money to be made over the next five or so years unless you go for the individual stocks. is that an approach that you would take? >> you know, i think you're dead on with that, mandy. and i think that's the thing that investors need to look at right now.
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time and time again on your show and others, you hear about everyone talking about passive indexing. and i think there's a time for passive indexing. but it wasn't in 2000. it wasn't in 2007. and i don't think it's today. when you're looking at price to earnings, price to book, price to sales, across the board, mandy, you're trading at ten-year averages. there's nothing in the market as far as an overall index right now that's screaming buy. and one thing that i am concerned about when you look at profit margins for these companies, those are at all-time highs. so you really have to be a stock picker to find value in this market. >> yeah. and listen, david, to robert's point, not only is profitability at an all-time high, but we're seeing valuations looking pretty good. we're seeing free cash flow yields looking pretty good. do you think the overall market can still run? >> i do. if you look at inflation below 3%, that usually correlates to 9% to 10% returns on stocks, valuations, whether it's price to earnings, or you said it better, tree cash flow, free cash flow yield.
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that would also equate with high single-digit, low double-digit rates of return. and quite bias to active stock picking, my mom and dad didn't raise me to play for a tie. and that's what i think you do, frankly, in the passive etf arena. it is a better, more robust environment to add value as a stock investor and an environment where we're going to get high single digit rates of return in stocks. where correlations are separating mediocre companies from the better cash flow generators, capital allocators. look today. great ceo announces his retirement in my backyard, ford motor company. alan mulally, not just served the stockholder well, served the bondholder quite well compared to the indices. there i think in the auto industry is a great allocator of capital, names like honeywell, united parcel, here seating is another auto company, all good stewards of capital and good
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stocks. >> but david, what about the macro back drop? you've got barclays saying q1 gdp is tracking negative. what does it mean for earnings and for companies like the ones you've been talking about? have we got a contracting economic environment? not everyone agrees with that, but at the very least, a slow growth or potentially contracting economic environment? >> i pay a little attention to gdp and the economy, but i don't think that's the key factor that's going to determine the path of the stock market. it will be what's going on with corporate balance sheets, corporate cash flow, which is growing in the high single-digit range. earnings generally surprising to the high side as well as revenue growth. that's the right type of macro backdrop that i think offers itself to being sos, doesn't give us that 20% bear market that i worry about. the 10% correction, i'm not smart enough to make that call. but in an environment of high single-digit rates of return and
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a cash-flow-rich environment, stocks are going to outperform traditional bonds and certainly outperform the hedge fund arena which has had a tough go the last five or six years. >> good to hear your thoughts, as always. thank you. >> which by the way, before you go to a new thing, david makes a good point. the huj fund arena has had a tough environment. even though the market has more than doubled. >> what does that say? >> if you had bought the s&p 500 five years ago, you had some pain at the beginning, you've money doubled. why are hedge funds had a problem? pretty much anybody could have thrown a dart and made money. >> so much for the proverbal smart money. >> 2-20, baby. a new republican report meantime says 33% of obamakaren roll obamacare enrollees have paid their premium. can it survive? and it's mystery chart time. can you name this stock? here's your hint. especially on the radio. it is the worst performing stock in the s&p 500 this year that is
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not breaking up. i say that, mandy, sally mae is the worst, but it's spinning off part of its business. the worst organic performing stock in the s&p 500. tweet your guesses to @mandycnbc along with a compliment. her birthday was yesterday. we're back after this. >> yeah, thanks for saying so yesterday, right? >> whoops. female announcer: sleep train's interest free for 3 event
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obamacare enrollment numbers. bertha coombs will break in as soon as she has info for us. this follows a report from republicans saying a whopping one-third of people who signed up through the federal exchanges haven't paid their first month's premium. hhs responded to that report saying data republicans are using is not complete, and it believes the payment numbers are, in fact, much better. let's talk more about this with a manhattan institute's paul howard. paul, i know that you're saying take this report with a grain of salt. regardless of that, regardless of what the actual numbers are, does it really beg the question as to why we can't get an accurate picture of how successful obamacare has been so far? >> right. and that's a very good point because if the administration really wanted to know that number, they could have asked insurers at the end of every month, on march 1st, tell us how many were enrolled at the end of february. on april 1st, tell us how many were enrolled at the end of month. if the administration wanted to know those paid enrollment numbers, they could know them by now. realistic by the end of may, we
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should have all of those paid enrollment numbers through the end of rope enrollment. >> what do you think a more accurate number might be instead of the 67%? >> it's going to vary state by state. what we've been hearing from insurers is that they're looking on average at 15% to 20% unpaid premiums. i'd expect the number to hover there with bigger numbers in poorer states and higher numbers in states where more enthusiastic about obamacare and that are probably wealthier, too. >> yeah. i mean, let's take a look at this from an economic point of view. we are cnbc and that's what we do. the penalty is 1% of your income over the tax minimum of $10,100. divide that by 12. in some cases, people are smart. won't they just make the economically rational division unless they're going to have a catastrophe in their life and take the cheaper option? >> for young people making $35,000, $30,000 a year who are eligible for very little, if any, subsidies, they're actually going to do exactly what you said, which is sit down with a pencil, figure out how much
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their premiums are going to cost and say that's too much. it's going to be less than the tax i'm going to potentially pay at the end of the year even if the irs tries to go after me. i think a lot of those people will sit out of the market this year. it could be we've seen a surge of people not in great health. we need to sit tight and see how these numbers shake out. we know very little for certain right now. >> and that is the key to the success of the of the whole program is that we get those young enrollees to be able to pay for the older. another thing came out of the committee report and that is the lowest percentage of enrollees who paid the first month is 65 plus category. only 1% of those have paid. 1%. even if that is remotely accurate, even if it's 5% in actual fact, but still, it's shockingly small. >> remember that if you're over 65 and you're a u.s. citizen, you're eligible for medicare. so i'm not surprised that's a very tiny number. it's also low numbers tore the young people enrolled, and that makes sense, too. if you're the one of the people enrolled at the very last minute, march 31st, i'm not
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telling you this was a real big high priority for you, and those people might be the first ones to drop coverage later on if it turns out they've got another big bill they need to pay. >> paul thank you very much. let's go straight over to bertha coombs who has been lisping into the hhs conference call. bertha, what are we learning? >> conference call under way. here are the headlines. the number is still 8 million people having signed up through april 19th. remember, a lot of states ext d extended giving people that sign to sign up. 2.25 of them are between the ages of 13 and 34. if you count people under 35, the number goes up to 2.7 million. that's about on target with what the administration had wanted. the really interesting thing is some of this states some of them that do not have their own exchanges actually saw their numbers double. over the last month and a half. we saw texas go from 295,000 at the beginning of march to 733,000, making it the third largest state in terms of enrollment. and florida vaulting to number
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two with nearly 1 million. california which had been very proactive had a very strong website. ends up with 1.4 million. but some of those numbers, again, may still be coming in because some of those folks haven't yet paid. back to you guys. >> all right, bertha coombs. bertha going to monitor that call. maybe if they get to some of the paying aspects we talked about. >> and some of the questions we were just talking about. >> see how many the government says it paid and also you've got to give it time. some people may be late, delayed. >> some haven't even received their bills yet as paul was saying. meantime, i have good news. >> i want give news. give me good news. >> ceos in america are the most optimistic in the world. that's according to the latest results of the ypo worldwide global poll survey. the reason for that rise in confidence, healthy forecasts for sales, capital spending and employment. chief executives say they are expecting to hire, that's even better news, with 41% of respondents plan to increase their staff by 10% or more in the coming months.
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ypo exclusive, cnbc partner, they have 20,000 executives worldwide. those executives generate, and their companies, $6 trillion. >> with a "t"? >> with a "t" in annual revenue. they're not only seeing good sales, they're going to hire. oh, by the way, jobs report tomorrow. >> yeah, payrolls get an accurate picture of what's going on. today's the day the market gets back to focusing on earnings reports. therefore the earnings squad is ready to tell you all about the three big names to watch before they report. yeah. and we're going to talk more about the dark clouds over the cloud companies here. it's not all good news. and herb greenberg, mr. dark cloud himself, pretty much, he'll be here. "street signs" will be back right after this. [ male announcer ] the wright brothers started in a garage.
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joining joining me today, dominic chu and jon najarian. 56% beat eps targets. 11% have met estimates and 21% of earnings have come in below forecasts. let's kick it off with open table. this could be a whippy one. last time they reported and their quarter seemed good. guidance was disapointing and
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they sank. we're really watching this. lately the company has been articulating a strategy of experiential as opposed to transactional. >> that sounds so transvental. >> sticking around so they could increase revenues, right, if they offer more content. they are focusing on things like payment services so when you go to a restaurant, you don't have to whip your wallet out. >> it makes sense. >> ways of sharing meals, sharing pictures. >> if the consumer will do it. can you see why they want to. the consumer may not want to because it's taking them from something that's been free to now all of a sudden to potent l potentially walking away and having the restaurant ding you for walking away. >> how do they make money by doing it? is there a fee charged is this do they charge a reservation fee to the economy? >> as they go through the strategy change, we're going to be listening to the conference call as to clues whether they're gaining traction and weather arre weather restaurants and diners are taking the bait.
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linkedin, interesting, too. what are the options pricing in terms of a move? >> well, i think it's really all about timing for this one, melissa, because in this case, in particular, the stock is down from over 200 to 144ish. and that's about where it bottomed, 143 or so. bouncing back up and making a noose move today, as you see, 159. i think it's all about revenue. and are the revenues growing? are the sales that they're doing growing at about 35%? streets looking for 30, 32ish. i think they've got to be a whisper higher than that to make an impact here. and it's about premium subscriptions as well. >> right. >> not just the freebies with linkedin but the premium. if they can show growth there, then i think this stock goes through 175. >> i mean, talking about transactional to experiential, this is the prime example in terms of the business model of a company that's successfully done this where you think you go on linkedin, you want to be hooked up, you want to find a job but it becomes a much more of an
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experiential experience, so to speak. because they're offering content and you're willing to pay for premium if you're getting something else. >> i used linkedin. i still use the free service, but all those things i really want to do it says i have to pay for. i'm waiting to see whether or not i'm going to bite at that piece of bait. >> if you were an employer, you'd probably be forced into the premium side. let's talk outerwall. this, as you all know, the former coinstar. >> and redbox. >> exactly. >> the reason why i loved watching outerwall is because over the past eight quarters, two years, this stock goes, on average, up or down by 8% after earnings. this is a volatile stock trade. and the options market, pricing in just that same move. 8% this time around. so what we're watching for is all about whether or not the redbox side of things is actually doing well, and remember, they have this streaming service they've teamed up with verizon on continue is it gaining any traction? we've talked about netflix so much, amazon prime.
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these are competitors to a guy like an outerwall. that's a big piece of commentary. >> it's tough for them because the metrics against which they're going are very high. those are millions and this might be in the thousands. >> that does it for us here on "the earnings squad." i'll see you tonight on "fast money." back over to mandy. almost time for an epic housing throwdown. they're going to be duking it out to decide what's wrong or right with housing. here is one possible answer, though. student loan debt. you know what? you can't buy a house if you can't repay your school loans. you've got to live in your mother's basement. the gloves are coming off in about ten minutes' time. >> the mystery chart. worst performer in the s&p 500 this year. next clue. let's make it a little harder. if you go to visit this company's headquarters, eat at -- i don't know -- cafe le cat and listen to the replacements or do longbulling in brit's pub. and "street signs" is broadcast
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[ banker ] sydney needed some financial guidance so she could take her dream to the next level. so we talked about her options. her valuable assets were staying. and selling her car wouldn't fly. we helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today...and tomorrow. so let's see what we can do about that... remodel. motorcycle. [ female announcer ] some questions take more than a bank. they take a banker. make a my financial priorities appointment today. because when people talk, great things happen.
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make a my financial priorities appointment today. trwith secure wifie for your business. it also comes with public wifi for your customers. not so with internet from the phone company. i would email the phone company to inquire as to why they have shortchanged these customers. but that would require wifi. switch to comcast business internet and get two wifi networks included. comcast business built for business. focus. focus. >> time for "street talk." analysts' recommendations. let's start with panera bread.
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positive from neutral at susquehanna. >> up 2.5%. interesting call. t they up graded it. that's still 28 bucks of upside from the current price. not bad. they cite valuation. they also cite quantityification of costs, whatever that means. either way, they're very bullish on panera bread. >> also abercrombie & fitch getting an upgrade to buy. >> look at that. and the stock which was a dog. this was the worst of the worst. it's really come back. in fact, the stock's up another 4% to 38.28. their target goes to 50 bucks from $37. so they're still wildly bullish. also nominated four new board members earlier today. remember, they've been fighting with pretty much anybody. still bullish. 50 bucks a share. >> nabors industries. it's all about the buys today. but it's not helping the stock. >> yes, this is an oil driller, not a gomer pyle-related name.
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guess what they cited. take a wild stab. >> weather? >> now, listen. this drilling in williston up in north dakota, i get it, but still nabors industries getting a bullish call. >> wouldn't you say it's always bad weather up there? just sayin'. >> but lovely people. big fans of cnbc. >> hello, everybody. also jetting an upgrade. >> wow! big gainer for farrow. it's a 3-d imaging and measurement technology company. target decreased from $60. still, they see 5 bucks of upside even with the target cut. let's take a look at the under-the-radar pick. it is lift off the rock, take a look underneath. pharmaceutical company merrimack. it is absolutely soaring. 54% from the upside. >> when you have a positive drug trial and you have one drug, this is what happens. you've got to be careful. it's a massachusetts. based biopharma company soaring
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today. in fact, positive test results for new pancreatic cancer drug that improve the life of its patients. great news from the folks at merrimack. up 54%. you can see it's been a very volatile name. and i believe earlier it was too small for us to talk about. with today's move, it is over-the-market cap requirement. all right. speaking of cloud computing, how's that for a non sequitur segue. one of my predictions for this year was that cloud computing company, pure plays, really, might come down a bit in valuation because they were trading at 100 times earnings. take a look at some of these cloud names. metadata solutions, down 43%. cornerstone on demand down 36%. concur tech down 34%, ultimate software down 27%. let us bring in herb greenberg. herb, i made a screen on my fax set, i've got 30 pure play cloud names. not or carell or the big names, et cetera. almost all of them are in the
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red. you're also coming out against these companies. what's the problem? >> well, it's not that i'm coming out against them. this is the kind of thing you sort of could see coming because this is the classic wall street situation where everything is supposedly cloud. what is cloud? do people really understand what the cloud is? i think it's fascinating. back in 2009, larry ellison was actually confused. >> i don't know about you, but i can't hear -- >> he said -- you can't hear me? >> the audio being run by a cloud computing company. >> oh, really? >> straight through the internet. you there, herb? >> i am here. i am here. can you hear me? >> continue your rant. you were talking about larry ellison in 2009. when everything is red? the sky is red? >> absolutely. >> explain this cloud computing thing to me because it feels like, you know, everything's being lumped into the same basket. >> and that's what happens. and that's what happened because remember, the true cloud were those who rented space on servers like amazon.com. that's a commodity business. then there were those companies that, you know, used the cloud,
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of the software companies that started to replace the deployment of software with basically allowing you to come in, make it easy. you don't need service anymore. that is what this whole sort of cloud bubble has become. >> and the issue that i had and sort of wur oone of our predict these aren't good companies. some of them had valuations that were basically greater than their market opportunity. it's like if they had every cher in the world, they wouldn't ever have the revenue to trade at 50 times earnings. >> but that's classic. we see that in those momentum names all the time. at some point we know the air seeps out of them. just because they have cloud, most of them or many of them aren't making money. you can look at the list you had there. if you look at ultimate software, i haven't spent a lot of time on it, but when i went through your list, that's the one that actually makes money. imagine that. so maybe it's not down as much as -- i forget what your numbers were. but i think that's what happens here. people just lump them all in. ellison saw it back then. he saw it was coming and he was
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trying to sort of get differentiation. but you know the way the world works. everybody just wants something to hang it on. and that only goes so far. by the way -- >> yep. yes, herb. >> yeah. and the investment bankers back then, they've been knocking at everybody's door. this is the one-time opportunity. >> in our morning meeting, i said cloud is the new green. remember a couple years ago, every company said they were green. we make dangerous chemicals. but we're green. everybody did that. now you've got mcdonald's in the cloud. everybody's just throwing cloud on their name. it's like the new dotcom. give me a break. >> yeah. i agree. >> hotmail is the cloud. gmail is the cloud. >> yeah. >> it's all the cloud. >> cloud label premium. >> god love the cloud. >> god love the cloud or not as the case may be. herb, we've got you. we're going to ask you, the earnings season has been really heavy in all the bad-weather blame, but unlike a lot of the finger pointing, you've found a company that quantifies it, breaks it down, does exactly what the weather did to their business. >> this is the only company i've seen do this because it's interesting when you have the
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chipotles and buffalo wild wings saying there's no weather impact. then a bunch of retailers saying there is. sally beauty, in their earnings report today, they came out and they said this is great. extremely unfavorable weather in the u.s. resulted in 5,400 store closings in 2014. versus 1,328 in the prior year. you know what? you can't fault them for that. they're giving you the numbers. and that's what most of the companies don't do and actually going forward, should do. >> indeed they should. mr. herb greenberg, you tell them. thank you very much for joining us. >> no tie. don't you think he'd look better with a bolo? you're in san diego now. fill rivers, quarterback of my chargers. >> he needs to have a chain, the whitened teeth. you've got to go full san diego, dude. get yourself a yacht. >> i'm talking about the chargers, it's a football team. >> i have no idea. >> i have told not to go full san diego. this is my uniform. >> you stay classy anyway, herb. >> i will. thank you, brian. you, too. >> tell baxter i said hello and
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don't eat the whole wheel of cheese. thousand now to "talking nu" safe to say domino's shares are not delivering today. yeah, i know. excuse me, shares off more than 2%. despite higher earnings. however, shares still up 32% in the past year. what is behind the drop? should you buy now? let it go? let's start talking numbers. richard ross. on your fundamentals is mark lichtenfeld. mark, we begin with you. your take fundamentally on domino's. >> as a born and raised new yorker who loves good pizza, i'm always surprised when anyone orders a domino's. apparently a lot of people did because the numbers were quite good. a lot of positive things you could point to including same-store sales and operating margin. but there were some issues that i'm very concerned about. herb was just talking about weather. well, domino's mentioned that weather was actually responsible for revenue growth whereas most companies had problems with the weather.
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with domino's, people just stayed in their homes and ordered domino's. that's a piece of revenue you can't really depend on going forward. but most importantly, they mentioned commodity prices are soaring. now, domino's had guided that commodity prices would be flat to down 2% in 2014. today they updated that guidance to be up 4% to 6%. that's significant increase. and they said that they will not be able to pass that along to the consumer. so you have some real issues to be concerned with. plus the stock is not cheap. the whole sector is not cheap. and trades in line with the sector. but you consider those issues with the fact that it's an expensive stock. and i think there are better opportunities elsewhere. >> sounds like they've got a lot of headwinds. to your point, sir, we live in manhattan. there's a pizza shop on every single corner. on pizza night, what do my kids want to order? domino's. >> great pizza in new york. >> first "street signs" ceo award won, by the way.
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if he was here, he would say we're more than pizza. and he's on "mad money" tonight. >> there you go. >> perfect segue. what does the chart tell you? >> this is a stock which is going lower. i do not like the name here. i would be a seller into any strength. first let's bring up that one-year chart and i'll show you why. this stock's issues have issues, mandy. you can see we're sitting right on that 150-day moving average. yes, it's been a strong performer. you see that rising trend line. it had risen over 50% over the last year. but now we have that well-defined almost a textbook 10% correction within that classic trench annal. here's what i don't like about the stock. we've now had two tests of that 150-day moving average in just the past two months. mandy, prior to that we hadn't touched the 150-day in over two years. that tells me the momentum is eroding and the stock's going lower. now with when you look at the weekly, look at the critical importance of current levels. you see that very well-defined trend line. that goes back almost four years, mandy, with the stock up
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3,000% over the course of that time. now hugging on perilously to that trend line. any break, can you see the decline, the potential. that 150-week moving average down around 27. that's $25 down from current levels. it can happen. i don't like the stock. you want to sell it here and sell more of any break of that trend line in the 150-day around 71. >> your issues have issues. >> like the merle saunders song, great funk singer, "my problems got problems." classic song. rich, thank you very much. mark, appreciate it. and be sure to check out the online edition of "talking numbers" in partnership with yahoo! finance. as mandy said, jim cramer tonight on "mad money " will be speaking with that guy, patrick doyle. i'm sure commodity costs will come up. every commodity pretty much out there is up. today we're also breaking down the housing market. we're looking at from every single angle. so coming, we're going to be tackling the angle of home buying that we actually really ever consider. >> that's right. the question is, how is our
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changing culture affected who buys a home? we're going to debate that next. first, let's get to bill griffeth and kayla tausche for a look at what's coming up on "closing bell." >> can the dow rally back? stay tuned. that critical last hour coming up. plus, vladimir putin threatening an oil war if the u.s. imposes more sanctions. could that impact prices at the pump? we'll have that story for you. also welterweight champ himself floyd mayweather will be with us to talk about his upcoming bout and tell us why he wants to buy the l.a. clippers. actually, he could have an inside track. he's friends with embattled owner donald sterling. >> that should be an interesting story. don't forget earnings. we have 10% of the s&p reporting today. all that and more on a busy couple hours ahead on "the closing bell life inspires your trading.550
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all day cnbc has been looking at the state of the housing market. diana olick and steve liesman have been walking us through the so-called blueprint, if you will. in "squawk box" we looked at the foundation, affordability.
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in "halftime," we looked at the ground floor, supply. now we talk about what makes a house a home, family. it's people like us. and guess what? demographics are changing real fast, right, steve? >> absolutely. one of the key things we've seen is the rise of the single-parent family. that changes the kind of house that you want. i don't know about, but if you're living alone with a couple kid, somebody else to do the lawn or take care of the house, that's why multifamilies -- let me show you the rise here of single-parent families. you can see it's quite a bit up from where it was previously. folks, that's the cue for the change in the graphic. we may not have it there. anyway, it goes up to around 31%, diana, from what was nearly 21% in 1980. that's why we bring in along here. i don't know if we have my second chart. it's a great chart. and what it says is -- >> you're such a tease, man. >> there we go. here we go. brian, do you get the -- >> it was just delayed. >> -- gratification. do you get the headline? >> yeah. >> go ahead, sing it for me.
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♪ uh, uh, uh, uhh staying at home ♪ >> rising percentage of men and women between 18 and 24 living at home with their parents. now, part of these people are going to want, when they do get out of the house, if ever, apartments. but some portion also are responsible for why we've had single-family homes lagging. >> what i'm saying, steve, is more of them than we ever thought before are going to want to live in apartments or single-family homes. look at the growth we've seen. i've got a chart, too. i want to talk about apartment construction. bring it up. okay. apartment growth. outgrowing single-family homes. why? because developers know that this is where the demand is. people want apartments. they want them in the core of cities. they want them in cores in various suburban developments. they are looking for that rental option because they're a more mobile generation, because their jobs will make them move on more and because they don't have that confidence in the housing market. >> you hit on a key point there.
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the younger generation know that we've been through a crisis, right? they might have seen their parents, for example, go through the boom and bust cycle with their house. they might have seen their parents lose their job. they know that they have to move to where the jobs are. >> and vacancies are down. vacancies for apartments are incredibly low. now, that was household formation. you can take household formation. >> how about this, guys? no offense to either of your thesi, all these graduates are so saddled with student loans. >> right. >> how are they supposed to buy a house? coming out of school? $50,000, $100,000 in student loans. >> something keeping these kids at home on the futon at home is student debt. >> it's not just home ownership. there you go. look how low it is. it's starting to come back up. a lot of people confuse that with home ownership. they are two very different things. lowest level in 19 years. household formation what you're
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seeing going up at the end is renter households. not owned households. >> why did you say some people think that might be overstated, the fact that you've got these youngsters absolutely saddled with college debt. i don't know a single country in the world that has as much student debt as this country. why would that no the be a major factor? too many students. not everyone needs to be a college student. >> it's a major factor but the idea being if you get back to a normal job market, then they'll have income that can offset that. so when that comes back, not overstated for now, but let me just give you some big think on this. think about the institutions and structures in america. set up for the single-family home. assume diana's right. there's this changing taste. and not only this, but a preference among young people for the urban core rather than the suburban limits here. so what that means is our highway system is designed to support a suburban lifestyle. our mortgage system designed for that. it means big changes in a lot of american institutions. if, in fact, this trend is
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really happening. >> that's again why we're seeing and we talked about this in our cnbc 25 future series. you're seeing more urban cores in suburban areas. like bethesda and rockville or even westchester, we look around, any major city, you go out to the nearest suburb and you're starting to see these newly formed urban cores where people can work, live and play without having to go into the downtown. >> you're going to make a point, brian. >> two things. i was going to quote rush with subdivisions, any escape. whatever. >> we are impressed. >> the suburbs are boring. let's not assume. i'm going to give a shout-out to the millennials. let's not assume they're living at home because they can't get jobs. i actually know one family where the 26-year-old is working to help the family. where the parent lost the job, and the millennial is home not because he or she is broke but because they are helping the parent out. >> what are builders building now? >> multigenerational homes.
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>> two kitchens. >> that is a big trend. >> $4,000 a month for a nursing home. >> right, you're moving your parents in, your children in. >> my grandmother lived with us when i was in high school. it's tough. >> another thing keeping from people buying homes, lack of confidence. our cnbc all-america survey showing we're back off the worst levels of price expectation increases but we've never recaptured the levels of '07. you said that point before earlier, mandy. >> yes. >> people do not have the confidence in rising home values they once had. >> thank you very much, great stuff, guys. all right. let's switch gears now and hold everything. l.a. clippers' owner, probably former owner soon, donald sterling may dig in his heels and try to hold on to that team, but what happens to the value of the franchise if this thing gets dragged out in the courts, will the players keep playing for him? the answer to that clearly is hell, no. >> steve liesman nearly fell off the podium. once last chance to guess our mystery chart. the hint, if you throw out sally mae which is being broken up, by the way, it is the worst performing stock in the s&p this
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year. we'll reveal. the cnbc realtime exchange market sthnapshot is sponsored interactive brokers. interactive brokers. the professional's gateway to the world's markets. which product of the future will become our second skin, our third eye or our bionic brain? >> it's a device that tracks your health and your lifestyle. it focuses on your activity and how much you move around during the day. how much you sleep. and the third is what you eat. >> tracking 24/7 comes in the form of this sensor-laden
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all on thinkorswim that corporate trial by fire when every slacker gets his due. and yet, there's someone around the office who hasn't had a performance review in a while. someone whose poor performance is slowing down the entire organization. i'm looking at you phone company dsl. check your speed. see how fast your internet can be.
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switch now and add voice and tv for $34.90. comcast business built for business. time to time to reveal our mystery chart. the hint was second-worst performing stock in the s&p. sally mae is worst. i tried to give the minneapolis hits. local bar. the answer is that -- best buy, down 34% this year. 42% off its 52-week high of last november. it was a great last year and awful this year. >> okay. let's move on. los angeles clippers. >> l.a. clippers owner donald sterling may dig in his heels about the sale of the team. \s what happens to the franchise if this turns into a long, drawn-out legal battle? let us bring in sports attorney darren hydran.
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donald sterling is a lot of things. we've learned that in the last week or\s. but what he isn't is afraid of a courtroom. do you think he will fight this thing? >> from the people i've talked to who have spoken to him in the past, it is not hard to assume that he will fight this. it would be very easy for him to just sell off the clippers right now. we see that there are a variety of potential suitors, including floyd mayweather, david geffen, oprah winfrey, et cetera. but it looks like there will be a long, drawn-out battle between donald sterling and the nba. >> can you quantify to what degree the value might diminish if it was dragged through the courts? >> it is interesting. actually, if it is dragged through the court it may allow continued publicity to the selling process. we may see others come out of the woodwork and express interesting in selling the team. it adds to the perceived value of the team. the one negative to that is that nobody ever wants to purchase any sort of property in a franchise, in any sort of nba
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franchise, or nfl franchise, et cetera, if there is potential litigation. it could diminish the value because it could be eventually taken away from that potential owner. but i see it having a very nominal effect, not anything substantial. >> we talked to matt damon actually a couple days ago. i semi-jokingly asked him would he be interested in taking a piece, if he could. he actually said yeah. there are a couple of groups that have put their names out. obviously magic potentially with guggenheim partners, ellison and oprah. floyd "money" mayweather. how many more buyers do you think could come out of the woodwork here? >> you have to have the requisite amount of money but we may see individuals with a lot of money and who have that sort of publicity attached to their name. there is also the idea of matt damon who said he may want to
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take a minority interest in the team. \s as this lingers, we may here more and more individuals come out. right now magic johnson hasn't outright said that he's interested in purchasing the team but as you mentioned, guggenheim partners backed had him in a purchase of the l.a. dodgers. it is not inconceivable to believe that magic johnson is at play. >> as an l.a. guy, magic is an awesome dude but is there a part of you that would be a little bit sad if a legendary laker owned the clippers? >> in fact he just commented on the fact that the lakers coach was resigned -- >> kind of meanly on twitter. magic is such a nice guy. i was a little bit surprised. >> i was surprised. he's very tame in his twitter commentary and had that wasn't up to his normal character. >> darren, thank you for joining us. a rare bob dylan manuscript going up for sale. the original hand-written lyrics for two of his most popular songs are going to be auctioned
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off. guess how much they are expected to get? we'll give you the answer -- next.
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"hard money" for hard rain. bob dylan's original hand-written lyrics for that song will be auctioned off next month in new york's sotheby's. it expects to sell for between $400,000 and $600,000. but the bigger prize, the original manuscript for "like a
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rolling stone" which could bring in as much as $2 million. look at that. the note to the side. quite a gem. >> it is hard to discover that he wasn't really where it's at. did that mean -- second song lyric reference of the show. i think it is spectacular. robert zimmerman's parents would be very proud. why don't we check the markets? i got to bring my facts hit back up. dow and s&p slightly to the negative. dow closed at a record high yesterday. cnbc was ringing the closing bell. the nasdaq slightly positive but the real action, folks, is in the 10-year bond yield. don't roll your eyes, oh, boring. it is actually kind of interesting. look, just above the 2.6 mark. we were actually below that during the session. >> with all due respect, you're
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right, it is important, but we've been between 2.5 and 3 for a long, long time. tomorrow is the big jobs report. that could make all the difference. >> it could. some say because bond yields are so low, no one wants to be caught short. we've got to leave it there, folks. stay tuned for "street signs." we do welcome you to "closing bell" for this thursday. i'm bill griffeth. >> i'm kayla tausche. the threat of an oil war. russian president vladimir putin making it clear he would make life very difficult for western oil companies who do business in his country if sanctions get too tough. we'll get the latest and find out what impact this could have on gas and energy prices. >> it could get ugly. >> it could. >> but at least they're talking oil, not military.

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