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tv   Street Signs  CNBC  May 22, 2014 2:00pm-3:01pm EDT

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you and i were talking about that over lunch. why is it going up? because it was down yesterday. >> because it was down yesterday. so -- >> there is a scientific analysis for you. >> look at that. there you got it. april 23 to may 22nd, and we're little changed over that time. we hope you come back and join us tomorrow. stloo absolute >> absolutely. "street signs" begins right now. have a great afternoon, everybody. stocks are slightly higher. facebook shareholders meet, and we ask, is there another detroit somewhere out there in america? hi, everybody. mandy's out today. the great melissa lee riding shotgun today. we're doing that. plus figuring out why two major papers have conflicting housing headlines. the buyer's remorse some are having over ber nnanke's speech tour. and the list of the best five performing stocks in the s&p 500 this year. i promise, melissa, these will thrill and amaze. >> wow!
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and what if they don't? >> i have my fingers crossed. >> let's get a check on the markets here and where we stand. we are higher across the board here. it may not look like a whole lot is going on, but take a look at the transports for one. the dow transports hitting a new intraday record high. also we've got massive strength in the housing sector. off the existing home sales numbers for the month of april. xhb is higher. and a lot of the large biotech names doing very well in today's session. so ibb is higher by more than 2%. and all of this punctuated by the success of a chinese internet ipo, jumping more than 10% on its first day of trade. let's get to seema mody at the nasdaq. >> melissa, investors going shopping for shares of often called the amazon of china. going public here on the nasdaq with a lot of fanfare, i might add. there was a gold bull this morning right outside the nasdaq exchange. now, it's trading above its ipo price of $19 a share, but it's off of its highs, still raised roughly $1.8 billion in
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its initial public offering, making it the third biggest ipo this year and the biggest chinese internet ipo -- or company to go public here in the u.s. i've been talking to various market participants who say they're watching very closely for two specific reasons. one, investors looking for a way to tap into the fast-growing e-commerce market in china. in fact, melissa, i was reading a report, e-commerce in china, $200 billion market growing at 30% year over year. second reason people are treating as a test for alibaba. alibaba, the bigger e-commerce giant expected to go public later this summer. back to you. >> thank you very much. happening right now, facebook holding its second-ever shareholder meeting. it is getting under way in redwood city, california. morgan brennan is there for us. morgan, what is the big focus of the meeting? >> reporter: brian, this is the first time ever that shareholders from outside of the company are getting to put up proposals for a vote. so we have seven on the agenda today. two from the company, five from those shareholders.
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two of the most interesting, i think, is a call for more detailed disclosures of political contributions and a proposed recapitalization plan that would give one vote per share for all outstanding stock. that is not likely to pass, but it certainly makes a statement with facebook. >> morgan brennan, thanks a lot for that. watching facebook shares in today's session. we came across two conflicted headlines. "the wall street journal" out with an article saying there are signs of a suburban comeback. at the same time, over in "usa today," it put out a headline reading "cities continue to grow." so what gives here? let's get to diana olick who will settle the score for us. diana, which headline better reflects what is really happening in housing right now? >> reporter: well, melissa, it's really both. i think they're just reading the census data differently. but what i hear the most is that the youngest and the oldest homebuyers want to be in urban areas. that's your millennials and your downsizing baby boomers. of course, the builders and the
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active adult community would want to convince you otherwise on the boomers. but take a look at two data points from april. first off, multifamily housing starts were up 43% month to month and up 70% from a year ago. single-family starts really didn't move much. now, rents are up, but occupancies rose again in april, according to axiom metrics because rental demand is surging. and of course these multifamily apartment buildings tend to mostly be in urban areas. then today the realtors told us that condo sales were up 7% month to month while single-family home sales were essentially flat. now, not all condos are of course, in big buildings, but the bulk of them are and are in more urban areas. now, i spoke to a builder just last week who usually builds single-family homes out in the suburbs out in maryland and virginia. he told me he's struggling so much now that he's going to start building town houses closer into the urban areas because they're more affordable, and he can get the younger buyers into them. so i would say we're going a little bit more on the urban
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side. brian? >> yeah, diana, thank you very much. and we care about where people are moving because it impacts your money. there are stocks that are invested in this, and we are calling it locationomics. the economics of where we live and why it matters. consider this. if people are really leaving the outlying suburbs, the exburbs. obviously home builders, right? those who do not adapt like the one diana talked about who is, they could suffer. those who embrace, urban or multifamily may win. it could also be bad for the malls and even retailers who rely on suburban shopper. we have 46 square feet of retail space for every man, woman and child in america, folks. that is more than double the next highest nation. also, if more people come into the cities, it could be bad for the roads and for the car companies and for the companies that want to build you roads because fewer people choose to drive. there's less gas tax money. infrastructure stocks could suffer. and, of course, schools, your
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property taxes, they could go up. if residents don't fill the gap of those leaving. let us bring in lee gallagher from "fortune" and don peebles. lee wrote "the end of the suburbs." don is one of these guys who's getting it right, building in the areas people want to live. lee, i'm going to start with you. it's kind of funny, we saw those semiconflicting headlines today. where are people actually moving? >> well, the trend, i mean, diana had it right. it really is urban. if you look at those headlines, it was extremely nuanced shift that was being talked about. you know, the pace of growth right now is still higher overall in the cities than in the suburbs. but the pace of that growth had slowed just a teeny tiny bit in the cities and had had grown just a teeny tiny bit in the subu suburbs. but the overall picture is still the same. and you have it right. first of all, i love locationomics. i wish i had thought of that and put it in my book. what a coinage.
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it's great. >> i oe it all to kevin flynn, our producer. shout-out to you. >> it's fantastic, kevin. but you know, where the wealth is moving. if you look at the suburban icons moving into the cities, it's not just people. it's home builders like toll brothers. toll brothers is doing massive urban condo building. here in new york city and philadelphia, it's expanding. they're going where the buyer is going. and then if you look at the retail icons, walmart, walgreens, target, you know, home depot, all of these, you know, formerly suburban fixtures are coming up with smaller versions of themselves to wedge themselves into urban real estate. now, not everybody wants to live in a skyscraper in new york city. i don't think that's the answer for everybody. it's not the answer for most people. but what people want is to be closer to stuff. closer to things. closer to -- they want to do away with those 90-minute commutes that 3.5 million people are still doing. >> it is about location when it comes to the cities that are seeing the most growth. don, i'm wondering where you see the opportunity. we just showed a graphic with cities and their population
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percent change in 2013. but you take a look at others, austin, up 32%. san antonio, up 22.4%. charlotte, up 38%. it depends on what city in terms of the biggest growth. >> absolutely. tha in fact, some of the smaller large cities like a charlotte or jacksonville or you look at raleigh-durham, trample, those cities are growing more rapidly because they're somewhat of a more of a suburban environment and they're not supply constrained. new york city is supply constrained. values are going up rapidly. people are being priced outside of the market. you're seeing secondary markets like a brooklyn, like queens, long island city, and look at what has happened on the waterfront in new jersey. the growth is all driven there by supply constraint and price dynamics. >> so in terms of the ripple effect brian was mentioning in terms of where the building will be for malls and the roads, et cetera, i mean, when you look at some of these cities that are seeing the highest growth,
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they're sort of sprawlish cities. they're not the condensed cities like manhattan or hong kong where everybody's on top of each other. so there will still need to be the malls and the shops and the roads, et cetera. >> absolutely. in fact, there will be much less of a transition. it's a more gradual transition from urban to suburban, say in a phoenix, scottsdale, you're going to transition very rapidly and smoothly into a suburban environment as opposed to the extreme change of new york city or westchester. >> it's funny, leigh, because the real estate mantra has always been location, location, location. actually, you've pointed out that's not true anymore. it's about access, access, access. where are some of the areas where people can not live necessarily in the center city of philadelphia or new york city, but also have mass transit, a train, some decent dining options? >> that's absolutely true. i mean, one of the biggest movements that's happening is really the urbanization of everywhere. and not everywhere. the urbanization of places that are still, you know, close enough to the jobs center that people don't have these really
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terrible commutes, but where, you know, we're seeing these urban villages are going up all over the place. and sometimes right in the middle of suburbia. and it means there's a center. there's a place to go and not only get milk but have a coffee, go out to dinner. people want to be -- they want to come home from work, park the car and be able to go somewhere. maybe they can't walk there, but it's a two or three-minute drive instead of a 20 or 30-minute drive just to go somewhere that has a little liveliness. i mean, that's what people really want. that's what's driving this whole thing. multifamily construction. diana mentioned it, it's not only happening in the cities. it's happening in the suburbs. and that to me is one of the biggest revolutions happening. >> blackstone just announced it's beefing up livecorr. we are seeing it in the markets. leigh, thanks for joining us. don, you're going to stick around because our next guest penned the recent "wall street journal" op-ed titled "more detroits are on the way," highlighting the pension crisis facing the country. let's bring in the man who penned that op-ed, richard
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ravitch, the author of "so much to do." richa richard, great to have you with us. we understand there are massive pension obligations that many cities face. are we overstating, you know, the headline that there are more detroits? the sky is falling, right? because not a lot of cities are facing the same sort of population exodus that detroit is facing and having difficulty issuing debt in the muni bond market. >> well, i think first of all, retirement obligations, health care costs are rising faster than the rate of inflation. and putting enormous pressure on state budgets which, in turn, put enormous pressure on city budgets. when you add to that that there are sincere efforts to reduce the federal deficit which results in reductions in federal aid to states and cities, you have increasing pressure on those governments, those local and state governments, to balance their budgets. and politicians like to be able to avoid taxing and like to
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avoid, if they can, making service cuts. and if they can borrow and kick the can down the road, they do so. the problem is they've been kicking the can down the road for too long. nobody learned the lesson that new york learned in 1975. and therefore, there are many jurisdictions -- well, there are several cities around the country already in bankruptcy, and there are many more that are facing enormous fiscal squeezes, pressure who are cutting education spending, cutting infrastructure investments. and borrowing as long as the bond market permits it. >> as long as they can, right? i mean, why -- i'm not going to defend sort of these, you know, the borrowings of the cities, but as long as they are able to come to market at a reasonable rate, maybe four to six, 7%, why wouldn't they just continue to kick the can down the road? it's the very easy political option.
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>> it's a lousy option. it means -- >> not for the politician. >> -- that your grandchildren are going to be paying for the dinner that you're eating tonight. that is not a sustainable course of action, nor is it a fair allocation of benefit and burden in this society. >> well, you know, richard, one of the things that you mentioned -- and i agree with -- is that the pension liabilities. these unfunded pension liabilities are paralyzing many municipalities, and they're a hidden ticking bomb for us. but also, politicians tend to, in this instance, like to have their cake and eat it, too, but there's no flour left to make any cake. i think the challenge we have is that in cities, we just talked about the population demographics. now things are happening where you're having cities like, say, new york city. then you have more than half of the residents in new york city live in poverty. and so you have a shrinking tax base. and the top bracket of the tax base in urban cities are being pressed even harder. they tend to now leave for
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places where there are lower and more friendly tax. >> and that's a big problem, don. what you just said is a huge problem, okay? listen, if i was a new york city cop who retired, i'd move, too. it's too expensive to live around here. so what happens is, you spend your life working for a city. you get a pension. and then you move to florida or north carolina. and so you're not reinvesting your own income back into the area that needs you to do that. >> but to identify the next detroit, don't we need to have that shrinking tax? i mean, that's my point about detroit. to say there are more detroits on up there, are we overstating the problem? because that is a city that saw massive population flight. so only now we're seeing sort of investment coming back in. with the tax base shrinking and the unfunded pension obligations, that creates a problem. and the inability to actually go to market and issue debt effectively. that's when it all catches up. but until all those things happen, you know -- >> i don't think there's another big detroit out there because what happened with detroit is
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you had had a massive and rapid population decline. detroit was a city built for 2 million residents. it's now well under 1 million residents. right around about 700,000. and so it can't afford to sustain itself. we don't have cities to where they're going to lose 50% of their population. >> richard, is there -- is there an answer here? is there a solution here? >> yeah, there is a solution. first of all, let me, if i may, correct one statement. the decline in population wasn't rapid in detroit. it took 60 years to the point where they're now the population of detroit is less than 10% of the population of the state of michigan. >> i must be too old because 60 years seems pretty rapid to cut the population in half. >> don, you're one of them. >> and i grew up in detroit. look, i see your point in terms of, look, the population -- there's no other city in america that has lost that percentage of population during that period of
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time. and that's driven by not just government policy but also there was one industry, it was a one-industry town, the automotive industry, which became a global industry and detroit didn't keep up with it. and that's a union issue. there are other issues now to talk about as to what destroyed the automobile industry in detroit for some time. >> you asked me -- >> solve the problem for us, richard, if you can. >> there is a solution, and that is that cities and states have to stop borrowing to balance their expense budgets. you borrow to invest in the infrastructure, but you do not borrow to balance your budgets because it's not sustainable. and it is coming to a crashing halt in more and more places. so the idea is not just to preserve the marketability of your debt, it's to match your recurring expenses with your recurring revenues. and if every local jurisdiction would do that, you wouldn't have
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a growth in the number of cities that ultimately are going to face the default on their obligations. >> richard ravitch, the book is called "so much to do." i love what you're saying because i remember the first week of accounting 101 in college. please match up assets and liabilities. it's amazing how we forget that. so basic. richard, thank you very much. >> my pleasure. don, before you go, you know what i'm going to ask you. are you interested in buying the l.a. clippers? >> absolutely. it would be tremendous. >> you're a rich guy. but i don't know if you have $1.5 billion sitting around. >> a lot of rich friends. >> i have some very rich friends. >> have you talked to any investor groups? zloo absolutely, different friends of mine. in fact, when this story hit, it was a sunday morning. i was catching up on my reading and watching the television shows and the news shows, mainly the political shows, and this started circulating. so i called one of my friends who runs one of the largest real estate funds in the country and said, we need to go and buy the los angeles clippers. and he said, they're not for
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sale. they will be soon. >> have you talked to adam silver? do you believe sterling will lose control of the team? >> have you talked to dick parsons? >> by the way, and dick is a friend and a very good manager there and one who's a big turnaround person, turned around aol time warner and citigroup as well. but, look. the nba has a bigger issue here. i think this situation with sterling kind of focused a bit more attention on it. you have an industry where most of the players are of color. and then if you look at the ownership, you have one team that's owned by somebody of color and one team that has a woman as an owner. and so i think the nba ownership should look like the diversity of this country and of those who play the sport. but i think it's a tremendous opportunity, especially when you have the clippers and one of the best media markets in the u.s. >> i just worry that there's going to be so many interested
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parties with money that they're going to wildly overpay for the clippers. >> why are you worried about that? >> because you're going to excessively enrich mr. sterling for this thing. >> he's the beneficiary. he is going to take a 12 or $13 billion -- >> he's going to shove $1 billion into his big mouth. >> when will the bid be ready? >> i think it's when the nba decides what they're going to do with the team. once they go through this process with mr. sterling -- and i think that's going to not be without a fight -- >> but you will be ready when the time comes. sl >> absolutely. we'll be ready to put a very competitive bid in. >> the l.a. pistons -- wait. that mascot's taken. appreciate it, buddy. >> thank you very much. >> good to see you. here's another question. is the big-box retail model broken? herb greenberg, no surprise, sure thinks so. he pages his case straight ahead. plus, with nearly five months already down in 2014, hard to believe, easy to lose sight of which stocks have been working through the years. so throughout the show, we're going to count you down the top
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five best performing stocks in the s&p 500 that have not been bought out. forest labs is number one, but that's a deal. so these are the names done well without being bought. number five, pepco holdings. if you live in d.c., you probably get your power from them. up more than 44% this year. the best four remaining coming up on the show. mine was earned in korea in 1953. afghanistan, in 2009. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote.
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a story here with regards to ge. ge is trying to buy french power systems maker. in a statement the company said that at the request of the french government, we, ge, have i agreed in consultation to extend the deadline for consideration by the alstom board till june 23rd to facilitate ongoing discussions with the government. so ge extending its deadline talks with alstom to take that company over. remember, the french government has expressed some reservations about a possible deal. this perhaps, brian, allows a little bit more time for some negotiating to be done. back over to you. >> all right, dom, thank you very much. from ge to gm, we've got more breaking news now. let's get right to phil lebeau. phil. >> and brian, this has to do with whether or not general motors' recall notices, will they slow down this summer. there is a new research out from barclays. bryan johnson met with senior management from gm yesterday. and his takeaway, he says recall announcements from general
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motors may continue through midsummer. that's based on his conversations with senior management at general motors. it doesn't mean we're going to see huge numbers in terms of multimillion vehicle recalls, but it does mean that we will be seeing some recalls likely to continue over the next month or two. guys, back to you. >> what's the tally so far in terms of total number of vehicles recalled? >> worldwide, 15.8 million here in north america, 29 million recalls this year. >> phil, appreciate it. shares of best buy jumping today after reporting a profit beat. but the big-box retailer said there could be a bumpy road ahead. let's bring in courtney reagan. not good for electronics. >> yeah, definitely not. you might be practicing a little bit of patience if you're a best buy investor. i spoke with the ceo after the retailer reported earnings this morning. he says lack of excitement in the consumer electronics category, quote, means in the short term our comps willing negative even though we're gaining market share. but i believe in the long term, there is a lot of innovation to come in that space. he wants shareholders to
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understand best buy continues its, quote, drive to be a frugal, efficient retailer, turning attention to igniting growth engines to deliver advice, service and convenience to our customers. every change is going to be incremental in this multiyear transformation. >> courtney, stick around, please. let's bring in cnbc contributor herb greenberg. an interesting article about a recent trip to best buy. and herb, you say big-box retailer, maybe like a best buy, is toast. how come? >> well, i think we've been seeing it all along. whether we're talking best buy or you look at staples, when you talk about messes, that conference call the other day, they're just trying to figure it out. i think for the very reason best buy actually said on its call, when they talked about rationalizing their footprint, that over the next few years, they need to do something. they made that very clear. and i have to tell you something. when a company like best buy tells you it's innovation in the electronics business, come on. i think we're all in on so much,
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it's replacement cycle. it's early adopters who will jump in, and then it's everybody else when they're ready to buy. so i think the big-box sector, look, you go there, i went there. i bought in-store because they matched the amazon price. that's the key thing that will keep me coming back. but interestingly, only 5 out of 20 people according to the cashier, price match. >> herbie, you know i love you partly because you come on and make grand statements. stacy, are we overstating this? because maybe this is just big-box retailers rethinking exactly what their footprint is going to be, so they will exist, but they may have smaller foot prints. we've seen that with walmart. best buy is doing kiosks for mobile. what's going on here, in your opinion? >> yeah, melissa. the bottom line is we're overstored in every sector. >> yes. >> and you know, circuit city went out of business years ago. and investors got all excited. great, we have best buy left. it's the last man standing so it's going to own all the market
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share. guess what is this this is just a category that's going through massive deflation. and by the way, there are no exciting products in the pipeline. so there's no margin here. and the reason the stock is up today is because margins were bad. but they weren't a disaster like they were in the fourth quarter. but we're not really seeing any product cycle coming around the corner that's going to change the top line here. yes, it's a cost-cutting story. but we all know how cost-cutting stories end up. they end up with where's the top line? >> stacy, your point, you probably heard the top of the show or if you don't, maybe you told me this stat, there are 46 square feet of retail space in america for every man, woman and child. the next highest is the uk at 23. canada is at 13 square feet, and australia is at 6. so we're 3 1/2 times canada. this is a race to the bottom in pricing. it's a race to the bottom in margins, and there's no way in heck that everybody's going to be able to survive this, is it? >> that's absolutely true. and if you listened today, walmart reported this week their consumer electronics business is
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down. target was up. it's just a tug-of-war for market share here. and everybody's saying great. we're going to undercut. we're going to price match. so again, you have margins collapsing. and you know, in q4, they said oh, this is just a one-time issue. this is not a one-time issue. this is a margin collapse in the sector, and that's not changing. >> there's got to be big-box retailers that are doing okay. walmart's doing okay, right? costco's doing okay. >> okay. costco's probably doing the best. they charge admission to get into the store which is brian's favorite thing to talk about. >> they should do that at best buy. >> i don't understand why everybody store doesn't. zloo collect admission at the door and people can compare prices and buy on amazon. >> ringling brothers, didn't they start that? that was their model, right? >> i don't think so. >> herb, what say you, bearded lady? >> what melissa just said. >> what? >> what melissa just said was the point that i made when i went there.
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you could do that now in the store. but that doesn't help their margins. you go in, you find it on amazon or some other site. they call over the manager. he looks at it. he approves it. you walk out of the store with the product at the same moment. >> herb, what you just said, what you wrote in your article which i love is you almost gave the argument for why these stores will survive. they may not be as big as they are because you had now syndrome. you wanted it now. you didn't want to wait even a day or two to get it. and that ultimately might be the saving grace for many of these stores. i want it now. >> best buy does order online, pick up in store. many of these retailers do that. they kind of need both. multichannel strategy is the way we have to go. consumers want choice. maybe we want to shop online, maybe in-store or a combination of the two. >> stacy, isn't shopping a hobby in america? and i mean that seriously. >> it is. it is. no, it is. again, you know, we had all these bulkup in stores in the good times, you know, in 2004, 2005.
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and after the recession hit, we really haven't come to grasp with reality. retailers haven't. and said, okay, we really need to cut 20% of our store base or 25. best buy will get to that realization. it's just going to be painful in the process. yes, it's a hobby. for many people. but also, now with people migrating online, we just, in general, have less need for stores. so time to right size the store base. >> and stacy, 7% of best buy's sales are online. i think that's the number that they gave out today. staples, i think it's about 70%. 7%. williams-sonoma -- i don't think they gave an e-commerce number specifically, but i'm sure it's up there. and interestingly -- okay, go ahead. >> no, we both have to go. i love the discussion. we've been long on every segment . our producer's about ready to a stroke. they need ambien in the back roope. room. do they exist in ten years? >> no. they haven't invested in their
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stores in years. they have so much catch-up to do. it's too little, too late. and these loyalty reward programs and trashing margins is not the answer. >> i think i meant xanax. you get the point. >> it's all bad if we keep talking. so you've heard of the $1,000-a-day hepatitis drug that is not the only sticker shock from big pharma. now the nation's largest pharmaceutical provider is your honor ping back against pricey pills, but can it win? and mcdonald's workers holding protests across the nation today, demanding better pay. we are headed to the front lines of the war on wages when "street signs" returns. avo: waves don't care what age you are.
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the nation's biggest pharmacy provider wants health plans to just say no to high-cost drugs. bertha coombs is here to explain this. it >> with a major caveat. has gilead been sitting it at $1,000 per pill? the pharmacy benefit manager's chief medical officer, steve miller, denounced it as unfair pricing and has rallied a coalition of insurers and health plan providers to play hardball with the drugmaker for a discount. at the company's headquarters in
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st. louis, he told me a key part of the strategy is to advise patients who can to hold off treatment, to wait until rival drugs come on the market next year. >> what we've said is actually we want patients with hepatitis treated, it just has to be at a price we can afford. if a product comes out that's less expensive, we're going to move our entire market share to that. >> now, between the high price of sovaldi and companion drugs, express scripts forecast that spending will double this year. rise by 200% in 2015 and another 200% the year after that. dr. miller calls the drug remarkable, life-saving. but it's at an unprecedented price. a threat because it's also a high-volume drug. >> the cocktail to treat the patients is going to cost well north of $100,000 per patient. we have 3 million patients in the united states that have hepatitis c that would be $300
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billion to treat them all. >> you can read more about miller's efforts and watch the rest of the interview on this is something that everyone is debating. you know, i've talked to patients who are on it. and it's really hard to argue just the value of this for those people's lives. >> definitely. >> are pills so expensive here because the rest of the world refuses to pay up? >> that's part of it. >> we create them. other countries won't pay. >> that's part of the problem. >> so we have to pay more. >> egypt which has one of the biggest per-capita problems with h hep c is getting the same drug we're paying $84,000 for here. >> bertha, thanks for that. next, we are talking numbers on irsg. >> and we continue to count down the five best performing being sos of the s&p 500 this year. and we're 0 for -- i screwed up. it wasn't pepco. >> you screwed up! wow! >> yes, i'm sorry. i make the list myself. >> first-ever mistake by brian
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sullivan, i say in jest. >> delta is actually the fifth best. number four, oil and gas company newfield exploration. up about 49% this year. ticker, nfx. please don't tell me that one is also been bought. we're back after this. predicting the future is a pretty difficult thing to do. but, manufacturing in the united states means advanced technology. we learned that technology allows us to be craft oriented. no one's losing their job. there's no beer robot that has suddenly chased them out.
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all right. no "street talk" today. let's go right to "talking numbers" from both the fundamental and technical perspective. today, intuitive surgical. the maker of the da vinci surgical system upgraded to equal weight. still the stock has lost one-third of its value. david seeburg, richard ross. david, first to you. battleground stock, no doubt. how do you view isrg? >> look, i mean, i think given the current environment, i mean, growth is still in favor. you know, the question is, is it still a growth stock? i mean, they saw earnings decelerate for the past several years. i'll tell you, it's not a cheap stock. it's trading at, what, 31 times this year's numbers. so it's two times the market multiple. i think this thing is very expensive. you know, i look at the technology. does technology really have anything super exciting coming
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out on the horizon? i don't see it. i also could say to you that it's a pretty expensive machine given the backdrop of what's happening in the health care industry today. so for a hospital to go out and spend millions of dollars on this machine, you know, essentially have it operate on patients, you know, a lot of the operations, you know, the procedures it's being done on are procedures -- and it's not necessarily necessary. i'd say it's a waste. i think it's more of a flashy marketing tool to get people to come to the hospitals versus a necessity. so that's my opinion. >> let me guess, you're negative. you're negative on isrg. >> i'm negative. >> all right. >> definitely. >> rich, what do you see in the charts? >> melissa, data-driven stocks with binary outcomes like intuitive can wreak havoc with even the best-laid technical setups. i'll show you why i think it's a weak hold at best with one eye on the exit. first that shorter-term chart, you can see that intuitive's problems really go back to last year. you can see that precipitous drop-off. now, we do have this explosive
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move higher as they get fda clearance back in april for their first major upgrade in almost five years. but melissa, we give those gains back as fast as we got them. clearly that's bearish. yet look at that nice little double bottom there at 350. you have resistance back up around that 150-day moving average. and prior support. so that's your upside resistance. 400. but let's look at that longer-term chart and i'll show you why you want to have one eye on the exit. the stock is up over 8,000% from the lows we set back in 2003. you can clearly see that double top which is bearish. and now we're clinging to that critical support at that 350 level which takes us back to prior resistance at those previous double peaks. any break below 350 could open the floodgates for the stock. you simply cannot own it below 350. in the short term, can you play for a tradeable bounce. but that's about it, melissa. >> all right. pretty much negative on both counts. thanks, guys, for your time. richard ross and david seaburg. catch the online edition of "talking numbers" in partnership with yahoo! finance.
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brian has been waiting the whole show for our next guest. the ceo of indy car live from the indianapolis motor speedway. >> yes. and all this hour we've been unveiling the best performing stocks in the s&p 500. number three, uh-huh. herb, are you listening? keurig green mountain. that stock has soared to 49.3% so far year to date. don't go anywhere. indy car ceo and the top two companies this year all coming up. tdd#: 1-800-345-2550 trading inspires your life. tdd#: 1-800-345-2550 life inspires your trading. tdd#: 1-800-345-2550 where others see fads... tdd#: 1-800-345-2550 see opportunities. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action. tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending. tdd#: 1-800-345-2550 and seasoned market experts to help sharpen your instincts. tdd#: 1-800-345-2550 so you can take charge tdd#: 1-800-345-2550 of your trading.
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check out this chart. nickel. it is the best performing hard metal this year, up 40%. this could impact the price of steel, rechargeable batteries and chemical testing. russia's norolisk is the biggest nickel producer. just three days until america's single-day sporting event, the indy 500. we are pleased to be joined by the ceo of holeman and company which runs indy car. thanks for joining us. obviously indy car is a big partner with nbc sports and vice versa. we appreciate you coming on. kurt busch, he's okay. had a hell of a wreck the other day. how has he helped the race? >> well, i think he's added a
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lot. everybody knows kurt and knows him to be a formidable nascar racer and to get him out here and see him do so well so quickly brings a lot of attention. he's going to start the race 12th. it's going to be interesting to see how he fares. >> he's doing really well. and this goes down to the visibility of the sport. you know, after the split, you know, called the dark years when it was two separate organizations, mark. as a fan, it was difficult for me to watch. how do you increase visibility of both the sport and the drivers? how do you get indycar -- you know, just keep moving up? >> well, we're on it now. and you're obviously a fan. you know the history. but i like where we are right now. the first thing to do is do all we can with may, everything at the speedway in may is really foundational for the indycar series. we had the grand prix here the opening weekend. we changed our qualifying format. attendance this may is up 30%.
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the television audience so far is up fivefold over last year. and we haven't gotten to the big race yet. so that's important. we met a lot of changes in the indycar series itself starting with its calendar. we added verizon as our title sponsor and they're bringing great things to us. >> and that was huge, also a big partner with the penske racing organization. it came in sort of at the 11th hour. how is indycar, mark, doing financially overall? >> well, we consolidate everything at the holman company. if you look at ims and indy, we're in solid shape. we're investing, adding a lot of people and technology. we just put a lot of money into race control. we're in the early stages of a growth mode. we're in very sound position. >> give us some good news. east coast fellows. any hope that the baltimore race is going to come back? >> i don't know. you know, we love the baltimore race, and i think they loved us. it was successful, but we had
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real difficulty with dates. they've got a lot of other professional sports stuff going on in town there. so i can't -- i can't throw you that bone, but there's some other interesting cities that are tourist destinations that are in the queue, and i think you'll see our schedule grow and get healthier in the states. and also i think next year we're likely to start with international racing before we get to north america. >> listen, i don't know if you're going to houston, but my lowly racing class was named as a support race. i made it through the lottery. i'm hoping to see you in houston. actually i'll be racing. probably at 6:00 in the morning. but whatever. mark, if you're there, come by and say hi. take care. >> i'll look for you. >> all right, thank you very much. and be sure to catch the firestone 600 in fort worth, texas, june 7th which airs right here, melissa -- >> oh, on counter. cnbc. and then the next ten on nbc sports. i watch from the beginning to the end. i'll be racing in houston with the indycar series on a low
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level. >> very cool, bri. >> it's very green. all right. ahead, the protests may have worked or was it an improving economy? fast food and retail chains are coming around to the idea of raising the minimum wage. are they doing it for good press or for economic reasons? we'll debate that when "street signs" returns. ♪
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see your authorized dealer for exceptional offers 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. switch now and add voice and tv for $34.90.
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comcast business built for business. hundreds of mcdonald's employees and activists took to the streets, specifically to the fast food giant's headquarters in oakbrook, illinois, to protest for a rising minimum wage to at least $15. is it a good idea though to raise it economically? joining us, cnbc contributor jerry bernstein and american enterprise institute's michael strain. i understand the protests outside the headquarters of mcdonald's but i guess my question is who sets the wages anyway? wouldn't it be the local store owners? spl sure. the local store owners set wages just like large employers set wages based on market forces up to a point. what congress has done since the 1930s is say we're not going to allow wages to fall below a
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certain floor. so wages are set by the minimum at the bottom. what i think what's interesting here, you've got a bunch of workers acting almost like a union to say we'd like higher wages. and interestingly, some of these companies seem to be sitting down with them and negotiating. i think it is actually a positive inve positive development. >> michael, you don't favor raising the minimum wage. i just wonder why. i'm looking at the stats. doesn't seem like there's anything to prove that raising minimum wage would actually be a bad thing. state with the highest percentage of annual drop growth was washington. mept a metropolitan area with the highest area of job growth, san francisco. in both areas they had the highest minimum wage. what's the issue? >> i think the employment effects of increasing the minimum wage is something economists debate. i think you would see some job loss. notably the congressional budget office also agrees. they say if you raised it to $10.10, you'd have fewer jobs.
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there are issues both ways and economists have to make a judgment call. if were the only policy tool we had to help the working poor, that would be one thing but we have better policy tools to help the working poor. earned income credit. we shouldn't increase the cost of hiring low-skilled workers at the time when the unemployment rate for low-skilled workers is extremely high. >> first of all, it is correct that the cbo found half a million job losses. they also found 24.5 million low-wage workers who would get a wage boost. so while michael's right -- and i agree with him -- i don't think it is costless to low-wage earners. the benefits are a 90% hit rate in terms of who benefits and who is displaced. i think in terms of other ideas, sure, we need a robust earned income tax credit just as michael said. but i don't think you can go back to congress year after year as the minimum wage erodes and
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get them to ratchet up redistribution through the tax code that way. i think you knee both. >> all right. we'll leave it there, guys. thanks for your time. jared and michael. weighing in on minimum wage. it is time to reveal the second-best performer in the s&p 500 this year. it is -- electronic arts. ea. despite all the talk about the death of the video game is up 49.5% this year. wow. all right. still to come, the number one most best -- >> numero uno. >> i knew you spoke french. ♪ [ bell ringing, applause ] five tech stocks with more than a 10%... change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day.
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12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. take them on the way you always have. live healthy and take one a day men's 50+. a complete multivitamin with 7 antioxidants to support cell health. age? who cares.
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all show we've been unveiling the top performing stocks of the s&p 500 this year, excluding companies that were or will be bought out. we skruped up with. heco. delta. newfield. green mountain. ea and the number one best performers -- neighbors industry. up 57%. >> by the way, this is huge. this just came in. >> we've got a worldwide exclusive to announce. worldwide exclusive. russian president vooladimir pu ln sit down in a live interview with cnbc. this happens tomorrow morning 6:00 a.m. on "squawk box." it's been a big week for the russian president. he secured a $400 billion to
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supply china with fuel. again, russian president vladimir putin worldwide exclusive on "squawk box." >> which i will be sitting in on tomorrow. that's gigantic. wow. lot of questions for the russian president. unbelievable. thanks for watching "street signs," everybody. >> see you tonight. "closing bell" is next. welcome to the closing bell, everybody. i'm kelly evans here at the new york stock exchange. >> i'm bill griffeth, back at the new york stock exchange. >> good to have you back. >> market looking to extend the gains made yesterday. we will get through the final hour of trading. plus, we're following a lot of stories today. i mean the market's kind of quiet, as you can imagine. but there are so many stories surrounding this market. what exactly is the fed's plan to get o you the of the market without losing control of interest rates right now? what if we told you they aren't rely


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