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tv   Power Lunch  CNBC  January 8, 2015 1:00pm-2:01pm EST

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lifted the s&p's 12 handles at 9:00 at night and just hours earlier we heard a more hawkish federal reserve who wasn't going to pay so much attention to low inflation. >> i like it. and i think the number will be good tomorrow judge. >> adp, we'll have to see. have a great rest of the day. that's it for us. "power" begins now. >> "halftime" is over. "power lunch" and the second half of the trading day start now. >> thank you very much. and i won't dance today at this hour. though i might, happy days, are they here again for the bulls? take a look at stocks at 1:00 p.m. on wall street. the dow industrials with big moves higher today. so too, the nasdaq. the s&p 500 and even the russell, which has been a little bit of a weak sister here is moving up coming along for the ride, up 1.5% at this hour. two major breakthroughs today to tell you about in the pharmaceuticals industry. one less expensive cancer fighters and finally, a new super bacteria antibiotic. and an energy opportunity, a big
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name is now bargain hunting. what does he like and should you follow along? and meanwhile, in france at this hour, special police forces have descended upon a northern town where two suspects in yesterday's paris massacre may be hiding out. they, those gunmen, are still on the loose a day after murdering 12 at a satirical magazine. we will take you live to france in just a few minutes. meantime though it is a real big day on wall street and sue's got it covered for us at the nyse. hi sue. >> hi ty. indeed i do. we're back in the black. with today's monster rally, right now we are up 289 points on the trading session. bob pisani come on in here. you know i was saying earlier, nobody really saw the velocity with which this market went down and then went back up. so there are people who are the wrong side of this rally. >> nobody's making money right now.
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i think that's a major problem. we've had a series of v-shaped rallies in the past few months and it's been tough to make money. this is a very powerful rally today. >> it is. >> let's show you the s&p 500. we were at what 1992 just two days ago? and we're at 2059. that's like, a 3.4% move. it's very broad. the main reason we're having this today is the stability in those macro factors. number one, oil stabilized in the last couple days. west texas is around 47 48. the ten-year note. yields globally have stopped dropping. those are the two most important factors. wide swaths of the s&p are up 2% today. and that's fairly unusual. so we have materials and tech and energy and industrials, all moving along very nicely. there's fundamental factors. we had very good retail reports on holiday sales. a number of companies raised their guidance. so american eagle, aeropostale, stage stores cato, zumiez.
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barnes & noble sales were up 1.7%. pier one was up 8%. urban outfitters up 4%. those are good numbers and i think it speaks to the idea that lower gas and better job growth is, in fact helping some of the retailers. meantime charlie evans over at the chicago fed, comments heard 'round the world, last night, suddenly 9:00 boom! futures moved 1r5 edd 15 points. i said what happened? everybody said evans is a dove but he's a voting member this year and i think that was a major factor. very heavy volume in emerging marngt markets, etfs. turkey china, india all have volume today. so let's say a little bit of this is fundamentals a little is stability and a little bit is charlie evans, quite bluntly. >> absolutely because the market now thinks we have interest rates low for a longer period of time. come on in the conversation kenny. you were saying that this is
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exactly what we ended at at the end of last year. >> right. you know the last day, the 31st, that took us right down to this 2059 level which seemed to be kind of -- the market felt it was okay took a little bit of that fluff out and repriced it. then as you see, the early part of the year it was, in my opinion, i think this was all driven by europe. i think that whole oil story is way overdone. i think the whole thing was driven by the nervousness out of greece and europe. we saw that come off the table yesterday when angela merkel said germany is willing to negotiate with the new greece government and we saw the action yesterday and then the evans comments last night just fueled this rally right back again. >> but oil is intrinsically linked to europe and russia. >> and earnings. >> and earnings so i don't know if you can really discount oil. >> it's not i'm discounting oil. what i'm saying is the move wasn't all about oil. everyone kept saying it was all the oil. i think it's the much broader -- >> what we see is we've just noted, when you see stability in
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bonds and stability in oil -- >> and then look what's happened. listen, oil's trading at $47 a barrel and we're trading near the highs again on the s&p and the dow. >> right. >> and so that's where it becomes confusing for people. >> it is. all right. we'll try and solve it this hour. ty, up to you. >> thank you very much sue. let's go to phil lebeau in detroit who's got a "news alert" on honda. hi, phil. >> reporter: hi, tyler. just a few minutes ago the national highway traffic safety administration wrapped up a conference call announcing that honda has agreed to pay two fines totalling $70 million for failing to notify the federal government and nitsa about incidents where there are injuries or accidents, 1,729 of these incidents over an 11-year period from 2003 to 2014. that fine the max of two $35 million fines means that honda's role has been wrapped up in terms of failing to let the federal government know about these incidents. as you take a look at shares of
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honda, let's be clear that there are still several other investigations involving air bags and other situations involving not only honda but other automakers in washington and with regard to these fines and these incidents, sue, the doj may be looking into whether or not there were some criminal action involved here. we don't know that for sure but we do know that some of this information has been shared with the doj. sue, back to you. >> all right, phil keep us posted. burt white joins us he is chief investment at lpl financial and carmine gregoli is with us as well at mizuho securities. nice to have you here. carmine, i'm going to start with you. we were talking about kind of the v shapes we're getting in this market and that the volatility has picked up dramatically even though we're only in the first couple weeks of the year. how do you handle that as an investment adviser? what are you telling clients to do? >> we are at a stage in the market where i think you have to remain fully invested. you really can't predict the
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terms. i've got the market going to 2250 by late summer 2300 by year end. we've got two very powerful catalysts at work here near term. you've got a massive decline in interest rates, long-term government bond yields 20-year bonds have declined by 150 basis points over the last year. if you go back in time over the last 90 years and you look at whenever you've seen total returns in the long-term bond market of 20% or more you get a 20% rise in the equity market 91% of the time it rises. the same thing with oil. if you look at oil prices going back to the '80s, and you look at other periods where you've seen a 40% decline in oil prices over six months the stock market goes up 27% over the next year. 95% of the time. so why would i want to raise cash in this environment? >> right. i think you probably agree with some of that burt but there are also people down here who are talking about the fact that this bull market is looking very long in the tooth. do you agree with that scenario or not? >> well not really because we
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know where bull markets go to end, and they don't end because of how long they've been moving higher. bull markets end because of excesses. and we don't have very many excesses right now. i think the real important thing to note is that volatility is on the rise and it will continue to be on the rise because that's what happens in the latter parts of market cycles. but i like to view pullbacks as coupons for your portfolio. and i think that the latest pullback we've had, this oil-related pullback has really offered quite a few great opportunities to clip and go and buy some things for your portfolios. >> what would you buy? >> we think transports right now look really good. look at the economic growth in the third quarter revised up to 5% strong holiday consumer spending. we've got, you know good economic growth. and nothing benefits more than lower oil prices than transports. and yet it dropped 6% in the five days that we saw with this oil-related pullback. that's a coupon as far as i'm concerned. we've got to clip that and put it in our portfolios. >> all right, carmine, what
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would you use your coupon to buy? >> well i would definitely buy into the beneficiaries of the lower oil prices which have been also consumer-related stocks in addition to the transportation. i'd be a buyer of retail autos, housing. i think those are all powerful movers in this market. and i also think health care continues to represent some pretty good value. you've got m&a activity likely to accelerate in that area and obamacare is leading to higher demand over time. >> all right, gentlemen, we'll leave it there. thank you so much. appreciate it, burt and carmine. to morgan brennan now for a "market flash." >> check out novartis at session highs. the swiss group said it will submit regulatory applications to the fda for two treatments against chronic obstructive pulmonary disorder basically smoker's cough. after clinical studies yielded good results. that stock currently trading up more than 3.5%. tyler. oil giving up some earlier gains. the billionaire investor mark lazzeri was on "squawk box"
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earlier saying investors stand to make as much as 30% on energy debt based on the current price of obligations and the projected cost of oil over the next two years. he also weighed in by the way, on whether oil stocks are worth betting on at these levels. take a listen. >> six years ago everything was going down. right? so there wasn't as many focus on this. the biggest difference today, i would tell you, is that in the last six years, the biggest macro theme has been energy. so the largest amount of debt that's been raised has been on the energy side. in fact, it makes up like, 20% of the high-yield market. so that's why everybody's focused on it. >> a lot to choose from. >> you're talking about debt. we had dick vassovich on last week. chevron, i think he said it was 4% year or buy exxon. i think he said he was buying it. does that make sense for viewers who don't play the debt markets but are playing the equity markets, if you will? >> i actually think it probably does because at the end of the day, if you believe oil's going
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to go back up, really what you're doing, equities are a leveraged bet on that. >> all right. we're going to drill down now on the drillers and exploration stocks with david tameron from wells fargo. welcome welcome. do you realize that you're one letter away from being david cameron, the prime minister of britain? i just thought i'd throw that out there. when we talk about oil and energy there are obviously lots of subsectors. which ones do you think right now offer the best opportunities given what's been going on in oil? >> yeah thank you, tyler. it's great to be here. thanks for having me. as i think about, you know subsectors of energy e&p sector similar to what we just heard, if you believe that longer term there is going to be some recovery in oil, and we think there will be. maybe you don't get to 90 or $100, but definitely a possibility to go back to that $70 or $80 range if you believe that. i think within energy e&p sector offers opportunity.
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there's a couple names we follow. one would be concho. permean basin. production this year probably 15% to 20%. that's going to be above the peers and do it relatively within cash flow. eog, another name large-cap name. best-in-class management team, great rock as they say, in the core of the oil plays, bachen we think that's another name if we take that 6 to 12-month view. >> any company with great rocks i want to invest in david. are you saying here that this is a turning point, or are you just saying that we're getting close to a point where these stocks become really atrablgttractive values? >> yeah, i don't think we're quite there yet. and maybe we're getting too cute trying to time the bottom but i still think you need to see some of these capital budgets get announced and for the street to see that okay cap ex budgets are down 25%, 30%. maybe it's that february/march
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time frame. so maybe we're just on the precipice but not quite there yet. so give it another month. but those are two names i think longer term are definitely going to outperform. >> i gather david, you see the rig count going down. that's number one. very quickly. and number two, that there are some areas of the energy complex that you would shy away from. what would those be? >> yeah just with respect to the count, you know right now cap ex we have it forecasted down, call it 25% for exploration and production cap ex. that may end up being a little light given where oil is at if oil stays here, sub-50 at $48. at that level you're looking for 6 to 650 off of a 1900 high. roughly down by one-third. stocks we would avoid. if you start thinking about the bachen, right now the bachen you're getting sub-40 on a net back. you know oasis, they cut the
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count. i still think it's got good inventory. you know they're fine as far as a longer-term company but near term, some of the bach.en names will continue to struggle. >> clear answers and good advice, david tameron. the dow back up more than 300 points right now? my goodness gracious. look at that. europe ending up big today as well. there's the dow up 309. how about that. the three major averages soaring between 2% and 3% over in europe. look at that. here is our chief international correspondent michelle caruso ka braer cabrera. the focus has been on greece. is the crisis there in any sense easing, michelle? >> there's hopes that there's some deal going to come around if we see this radical leftist win the elections. tyler, what i like to call hedge fund shuttle diplomacy is under way. the jfk to athens and london to athens flights are filled with hedge fund managers headed to greece. they want to meet with the
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controversial leader who, if the polls are right,t, could be the next prime minister of greece after the elections are held later this month. he's been so strident in his demands for changes to what the european union and the imf are asking greece to do that market watchers have grown very concerned that greece will end up leaving the euro either of its own accord or being pushed out. that's why greece's three-year yield has shot up to as high as 15% this week at a time when yields all over the world, nearly all over the world, are falling. however, the hedge fund managers come away from their meetings with his economic team using the word "pragmatic." they're told that a greek exit is unlikely. what is likely they say, is that he'll push the european union to forgive what are called official sector loans. these are the loans to greece from the various bailouts that came from other governments over the last few years, and that he will not push for the private sector including the hedge funds, for loan forgiveness. the reason the private sector bonds are really only roughly 10% of greece's huge outstanding debt of more than $300 billion,
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the vast majority greece owes to the official sector. reports actually came out of germany yesterday suggesting its leaders would not be against giving greece more time a lot more time to pay back those official loans and also at a lower interest rate to boot as long as they stick to some kind of reform program, which is a question. that's also what has led these hedge fund managers to believe that there is room for a deal. however, these yields are so extremely high tyler, it's obvious that that's a minority belief at this point. >> all right michelle caruso-cabrera. right now french police are entering a massive forest in the north of france. they are searching for the two men who attacked that french satire magazine yesterday, leaving 12 dead. the forest is about 50 square miles in total. that is larger than the city of paris. cnbc's hadley gamble is live in paris for us. hadley? >> reporter: well the interior minister was just speaking a few moments ago about that manhunt.
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we know that 88,000 security personnel across france are looking for the two most-wanted men in france tonight. i want to run you through some of those numbers. we have 50,000 police officers searching for these two suspects 5,000 policemen, 32,000 gendarmes. earlier they were going from house to house searching farms and villages for these two suspects. for you, what we know about these guys they're both in their early 30s, they're both french citizens. we also know that they were known by the intelligence circles here in france prior to these attacks. we also know that nine other people are in custody now. of course, in the rest of france this is continuing a day of mourning here in paris, crowds have gathered once again. i do want to mention one piece of news out of d.c., and that is that eric holder attorney general, is planning to arrive in paris on sunday. he's going to attend a meeting of terrorist experts. of course, this does raise some serious questions about the changing landscape of terror
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these days especially in terms of the legal aspects of this. we understand, of course, that the obama administration is working to close guantanamo bay, among other things. so some serious questions that have to be dealt with going forward. >> all right, hadley, thank you very much for the update. we appreciate it. freezing cold here in new york. it's been a very rough week. these pictures are just from a few days ago in washington. so when might we get a break? here's the weather channel's keith carson. >> some brutal cold over two-thirds of the country this morning, continuing through the afternoon. take a look at some record lows. 13 in columbus 9 in charlotte, 3 below in wheeling and 20 below in montpelier. believe it or not, despite the cold temperatures, a lot of record lows were not threatened because it was so cold this time last year. take a look at these windchills. a place like atlanta, mobile staying in the teens, maybe into the 20s. but it doesn't get much warmer than that. another chilly night tonight. this is not really a short-lived cold spurt, although this is the coldest part of it. it will stay chilly through
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friday and most of the weekend as well. take a look at the northeast here with your windchills staying in the single digits in cases below zero through the entire day. this, despite the fact that we're seeing a good deal of sunshine. it will remain cold there through the weekend as well. add to that some lake-effect snow. 18 to 24 inches a possibility. buffalo, we'll be watching them through tomorrow. so a very wintry scene. some good news for you, though. a little ray of sunshine. it looks much much warmer in the 10 to 15-day period. back to you. >> thank you, keith. that is a little built of good news. the s&p 500 and the dow now wiping out 2015's losses, both positive on the year. the naz being da's trying to do that. we're up 305 points on the dow right now. that's straight ahead. plus general motors revving up forecasts. phil leebeau is live at gm headquarters for us. hi, phil. >> reporter: hi, sue. after five straight years of u.s. auto sales continuing to move higher, gm believes we could be going above 17 million
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in 2015. the forecast and comments from ceo mary barrar when "power lunch" returns. your mom's got your back. your friends have your back. your dog's definitely got your back. but who's got your back when you need legal help? we do. we're legalzoom, and over the last 10 years we've helped millions of people protect their families and run their businesses. we have the right people on-hand to answer your questions, backed by a trusted network of attorneys. so visit us today for legal help you can count on. legalzoom. legal help is here. so ally bank really has no hidden fees on savings accounts? that's right. it's just that i'm worried about you know "hidden things..." ok, why's that? no hidden fees from the bank where no branches equals great rates. marge: you know, there's a more enjoyable way to get your fiber. try phillips fiber good gummies.
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welcome back to "power lunch." and check out shares of banco santander. it will raise nearly $9 billion through accelerated placement of shares. the bank would raise capital by
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selling stock overnight to investors. also announcing a dividend cut. that stock currently trading down almost 6%. sue, back to you. >> morgan thank you. family dollar missing earnings estimates. the discount retailer also reporting a drop in its same-store sales. and you can see the stock is down on today's trading session. jc penney closing 40 stores across the country by april of this year. affecting over 2,000 employees. and mgm resorts upgraded to outperform from market perform by wells fargo, citing strong underlying trends in the las vegas market. let's get a check on the big movers at the nasdaq. bertha coombs is there in times square. hey, bertha. >> hey, sue. one of the biggest movers is the nasdaq composite itself. 4736 and change is where you want to look. that's where we started the year. and right now we're just positive by about 1 point or so. and a big reason why is apple. apple, of course, the biggest cap. apple now positive. and right here at this level, $111.78, $111.89 is the level
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you want to watch. that's the 50-day moving average. if it holds there, then that's fairly positive for an apple close today. apple is positive for the year up better than 1% at this point. but so are a number of other big caps like monster beverage which keeps putting in new highs. that's up 9% for the year. gilyard, bed, bath & beyond. no surprise. tyler, again, no surprise here. the big losers are the small-cap banks. a lot of them with exposure to texas. back to you. >> bertha, thank you very much. ford higher. the automaker raising its quarterly dividend to 15 cents a share. ford not the only automaker out with bullish news. gm raising industry sales forecasts. gm ceo mary barra peek speaking out about it. phil, it has been a year since ms. barra took over. it's been a rough one, though. >> reporter: right. oh a terrible year in terms of reputation and public perception
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of general motors. but mary barra has been up front about saying look we can't change what's happened in the past. we can only try to improve in the future so we don't repeat the mistakes of the past. the shares of general motors down more than 10% in the last year, and that surprises some people who thought that the stock would take an even bigger hit given everything that's happened over the last 12 months. earlier today, with the focus being on what's new for 2015 mary barra gave a fairly optimistic forecast. >> i think it starts with the core of our products. i mean there's been a tremendous amount of work done and we have, you know several -- not all of which are announced yet, but we have many launches this year that i think, again, as we go into the marketplace with every product now, we're going in to win, not just to compete. and so i think you'll see, you know, continued strong product offerings. >> reporter: so when you take a look at general motors and its outlook for 2015 this is for industry sales. the company is expecting sales pace to come in between 16.5 and
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17 million. pricing strength gm leads the industry in terms of average transaction prices topping $36,000 per vehicle. and strong suv and truck demand. and that's key for general motors because that's right in their wheelhouse a strength of theirs is their portfolio in those two areas. look at market share at the end of last year. some people will look at this and say that's an all-time low at 17.8%. others will look at this and say given what happened in the last year, the fact that they only lost one-tenth of 1% that's not bad. 17.8%, they lead the market. guys, the bottom line is this. mary barra said it time and again today, it's wonderful that they're making a lot of the changes they're making but she's got to higher profits. >> thank you very much phil. big rally today on wall street. the dow up more than 300 points. most of the major indexes pressing in on a 2% gain for the day. so the question is is that it? was the selloff a three-day, a four-day affair?
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plus one class of really expensive cancer drugs is about to get a lot cheaper for patients. we will explain. and it's being called a game changer in the race to find new antibiotics. and it could be just the tip of the iceberg. very exciting news coming up after this. barbara just bought a bike. she wrote a tweet about it. you can't learn much from that. but take data from millions of tweets combine that with your company's supply chain and sales data. apply ibm analytics and expertise, and all of a sudden, you can learn which bikes to build what to make them from, where to sell them. because barbara and the world just told you how to build a better bike. there's a new way to work and it's made with ibm.
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welcome back to "power lunch." i'm kate kelly with a breaking market flash. the ceo of apache speaking at an
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investment conference earlier today saying that drilling in the all-important texas shale field may become economic for them at $50 per barrel as deflation sets in meaning lower costs associated with the cancellation of projects and the lessening of competition for drill rigs and equipment and labor and other costs. so some bullish words for the oil patch today as the general sector is on the rise. but apache shares up about 5% tyler. perhaps on these remarks from the ceo that $50 may continue to be able to be profitable for apache and some other names, which is a lower threshold than i think the market had factored in. >> all right kate thank you very much. a new recommendation to the fda could pave the way now with cheaper cancer treatments. meg terrell has that story. this is exciting news. >> yeah it's a really new thing. so we're just hearing this news out of the fda yesterday which could affect some of the most expensive medicines for cancer which are also some of the biggest moneymakers in the drug industry. we're all familiar with drugs
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like lipitor. often it opens up the market to cheaper generic copies. there hasn't been a path to market for generic copies in the united states. that's changing. yesterday an fda advisory panel recommended approval of what would be the first biologic drug in the u.s. the industry calls them biosimilars because they're not completely identical. it's called ep-2006 made by novartis. it would be a lower cost version of neupogen used to support the immune system when patients are taking chemotherapy. that and a similar drug brought in almost $6 billion in 2013 for am amgen. don't worry too much about amgen. it's getting into biosimilars itself. >> i read a little bit about it in the past day or two, a potential breakthrough in the search for antibiotics, an area that's been basically a bermuda triangle for 25 years or so. >> yeah it's one of the biggest
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public health crises superbugs when bacteria have developed resistance to antibiotics. it means many of our most important drugs won't work meaning common infections could be fatal. drug development hasn't been fast enough. scientists say they've discovered a compound that appears to be able to avoid development of resistance of bacteria and was shown to work well in infections in mice. they found it where a majority of antibiotics were discovered, in nature, but it's stalled in recent years as 99% of what they find proved unable to grow in the lab. it enabled them to test compounds that previously were out of reach for medicine. the antibiotic is still years from potential use in humans but it could be an important step forward in the field that desperately needs it. >> and a lot of these antibiotics, i was surprised to learn, come from the soil. >> yeah. and they're really really old.
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i mean these were found in the 1940s and '60s and we haven't been able to find anything new in nature since then. we've basically dug everything up. they were looking in really fascinating places like sewers and on the tops of volcanos. >> come to my backyard. maybe we'll find something. meg, thank you very much. morgan brennan has a "market flash." >> i've got to tell you, that was really fascinating stuff. we're going to pivot into the defense sector. that's after pulling back at the beginning of the year. we're seeing names rally. lockheed martin general dynamic dynamics, raytheon up 1.5% to 3%. back to you. to the bond market now where yields on the ten-year are above 2% once again. lots of volatility. rick santelli, tell us what's going on. >> reporter: well, i'll tell you what to say above 2% and make that a reference to wow, yields are moving up is still something that's hard to get used to. and maybe by looking at a two-year chart of tens you'll figure out why. yes, yields are up a bit. yes, yesterday we broke the
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streak of seven down-yield sessions in a row, but we're still on the low side as you can see on the chart. maybe the more appropriate place to be looking with treasuries after comments by charles evans last night is on the yield curve. and remember if you think central bankers are going to stick around longer especially the u.s. then the flattening curve has to be less flat and indeed that's the case. look at 24-hour charts of tens minus twos and then the ever-popular fives versus 30s. both have steepened a bit. it's probably liquidation of flattener flatteners. if you look at high-yield land and everybody is, let's use our friends at barclays charts whether it's a one-month high yield or five-year, you can see the spreads are widening out a bit, although the hygtf seems to be more aggressive. and the last chart, ten-year versus dollar we're hovering at the worst levels on the euro since december of '05. but even at these levels it's well off its lows because of the word "could" with regard to what mario draghi said related to quantitative easing and the january 22nd meeting.
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back to you. >> okay rick, words are very important these days especially when it comes to qe. what exactly is considered full-time work? that's the question at the heart of the latest fight over obamacare. what washington decides could have a big impact on business. "power" is back in two. the city featured in today's "power house" has hosted the super bowl twice. it's home to the world's busiest airport. and u.p.s. is headquartered here. can you name that city?
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welcome back to "power lunch." check out materials. one of the best performing sectors in the s&p 500 today, up more than 2%. now positive for the year. and leading the way higher headwest vaco. also martin marietta dupont alcoa, also making big gains today, each more than 3%. sue, back to you. >> okay, morgan, thank you. all right, let's check the markets because the dow jones industrial average is just below the 300-plus-point mark. we're now up about 298 points. the nasdaq composite strong up
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88 points. that's lkalmost a 2% move. the s&p is up 1.75% and even the russell is up 1.5%. let's get back to the trading action. bertha coombs is following the movers at the nasdaq. bob pisani here with me at post 9. bob, you go first. we're maintaining this gain which is the important part for the bulls anyway. >> this is a very powerful rally. now, we were talking earlier about the fact that even though it's a powerful rally and we're positive on the year nobody's been making any money. i want to point out a couple trends we're seeing in the market. what's up with stocks? third pullback since september that we've had. and each time we keep making new highs, it's true but the amount of time before the pullbacks is getting shorter. we're getting a lot of these "v" rallies, big down moves and then suddenly shooting up just like in the last couple days. and volatility is up. that may be fun cover. not many people are making money. as for the earnings we're going to start earnings next week. here's what i see. weak growth overseas a strong dollar, an energy ripple effect.
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what's it all mean? i might argue for lower growth going ahead. sue, instead of 8, 9, 10% earnings growth in 2015 a lot of people are lowering their expectations. i hear a lot of talk of 4, 5, maybe at most 6% earnings quote. now, that's not down but it's a deceleration. >> from what was expected. >> and i think that might mean a little bit of headwinds for stocks if we start seeing that. i'm glad about the retailers, but the upward revisions? the retailers we're seeing today is fwafshdwarfed by big downward revisions in energy stocks. >> right. >> maybe we could change this conversation with more positive comments from other sectors in the next couple of weeks. >> okay we'll watch for that. thanks, bob. appreciate it. let's go uptown to the nasdaq and bertha coombs once again. back to you, bertha. >> reporter: hi, sue. small caps continue to be the laggards here. they're up 1.5% to 2%. the move to the upside for the large caps. a big reason why, apple, the largest of the caps today is really on fire. we're seeing some acceleration here as it has moved above its
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50-day moving average. and as you start looking towards earnings, that's often when apple starts powering higher. we're also watching the chip stocks today. they're really one of the laggards so far this year. down about 0.5% as a group today. they're pretty strong. biotechs which are the gainers, a few of them to the weak side. back to you. >> all right, bertha thank you very much. ron is editor of market intelligence at two things we want to hit on today, ron. after a bumpy start to 2015 -- >> to say the least. >> -- to say the least, we've had two very positive days. what do you make of it? is it a signal? what? >> i still think from the u.s. perspective, it was a correction. you know, everybody was coming into 2015 absolutely certain that we were going to go up this year for reasons that years ending in 5, third year of a presidential cycle, strong seasonals. >> left-handed president, the whole business. >> so boom, what happens is this we hit a rough spot right as we come into the year. but you know we're recovering nicely and i think this is still
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a secular bull market in stocks. we just have to get used to a little more volatility and the possibility of corrections based on global concerns. >> you know yesterday over in europe they reported prices by one measure down and that was the first time in several years on a quarterly basis -- i think it was quarterly -- prices had declined. >> actually year over year. >> year over year prices had actually declined. there is less central banks can do with deflation than generally with inflation. how worried are you? how worried should we be did deflation? >> i wrote a blog piece yesterday called "deflationcy." and if you look at what's happening in europe where yields on ten-year german bunds are below 10%. yields on the japanese -- >> a quarter percent. >> a quarter percent. the bond markets are clearly discounting deflation as a global threat almost all around the world. even here with 2.02% on the ten-year, that's still relatively low given how rapidly
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the economy is growing. i think unless the european central bank takes this kpeerdly ly extraordinarily seriously, i think it's really not being seriously dealt with. it's been telegraphed by commodities, by the interest rate structure around the world. and it doesn't seem that everyone, maybe except for the fed which yesterday brought up world issues as a concern for them that anyone is heeding the message of these markets. >> ron, thank you very much. we'll see you throughout 2015, of course, and sue, down to you. well take a look at the green, ty and ron. the dow, the s&p and the nasdaq still squarely in the green and back in the black for 2015. we'll have a look at the stocks moving in this hour of "power" straight ahead. plus -- >> today's "power house" is the ninth largest u.s. city. home depot is headquartered here. and it has posted the olympics. can you name that city?
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welcome back to "power lunch." i'm morgan brennan. as oil prices stabilize at least for the time being, investors are getting back into some of the big integrated oil companies, conoco phillips chevron, hess anadarko all of those gaining today, up more than 2% apiece. exxon mobil trailing a bit. that's only up about 1%. but all of them higher today. back to you. >> all right, thank you very much, morgan. time for the "power house." we kick off a new year, home to the world's busiest airport. can you name that city? you know. it's atlanta! hartsfield. we are focusing on the suburb today of dunnwoody. with us from atlanta is realtor with berkshire hathaway homes services. good to have you back. i'm going to get some football thoughts on you later because i know you played in the big leagues. let's check out the atlanta market stats, shall we? according to the local mls service, median price about $446,000, just over four months of inventory, properties on the
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market for an average of about 80 days. our first listing is at 1705 redbourne drive listed at $599 highway $599,000, six beds five baths. you take that house, put it in my town it's $2.5 million, $3 million. >> yeah, you get a lot more for your money down here in atlanta. we'd welcome you to come on down if you'd like. >> i'll be there. >> yeah well it's a beautiful house. i mean, traditional style home. open living room feel. you know it's got an updated kitchen. stainless steel appliances. open floor plan. for $599,000 it's a steal. >> and the taxes are relatively low, $5,000 or thereabouts per year. our second listing at 8165 ball mill road. it's just $629,900 taxes about $5,500, 4 beds 4 1/2 baths,
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over 3600 square feet of living space and beautiful landscaping and grounds, i see. >> yeah a little bigger house. that house actually has a four-car garage marble floor entryway. as you said it's just beautiful. i mean, hardwoods throughout. stone fireplace. it's for a home that's built in 1983, it's a pretty good buy. >> that looks beautiful. obviously vacant right now, so you could move in and it looks like it is in move-in condition. >> we're waiting for you. >> our "power house of the week," that's spelled with w-y-n, by the way, listed at $1.2 million, taxes just over $9,000. six beds five baths, 5300 square feet of living space. tell us about that one. >> yeah this particular home is a luxury custom-built home. it's kind of what the dunwoody suburb is going to six bedrooms, five baths. you know the pool out back is just phenomenal. it's an entertainment dream.
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it also has a chef's kitchen, vaulted ceilings in the living room with a lot of exterior light. you know this is probably -- i don't know what this would go for in new york but for $1.1 million here in atlanta, it's a good deal as well. >> a lot more in new york. let me tell you, in new jersey the taxes would be much higher. you played for the panthers. they have a tough game this weekend at seattle. who do you like in that game? >> i've got to go with the panthers. i can't go against the team i played for. it will be a tough game but i think they'll do fine. >> cowboys and packers, who do you like? >> packers. >> afc, denver and indianapolis. >> that's going to be a good game, but i think peyton's going to go back and, you though take back his turf. although it's a home game for him, but he's got a thing for indianapolis. >> and brady versus the ravens. >> brady. >> there are your four picks. we give you "power house," nfl picks, thank you very much. and sue, you must be happy, he likes the pack. >> i am i love him because he picked my packers. there you go see. we'll what happens.
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it's going to be a great end of season for football. another fight over obamacare in washington. the debate and what is considered full-time work? the result could have some big consequences for businesses. plus the headlines that you may have missed in this hour of "power." we're back in two. [container door opening] ♪ what makes it an suv is what you can get into it. ♪ [container door closing] what makes it an nx is what you can get out of it. ♪ introducing the first-ever lexus nx turbo and hybrid. once you go beyond utility there's no going back.
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welcome back to "power lunch." so a short while ago we told you that defense stocks were soaring. they were. well, now take a look at some of those names. names like lockheed martin northrop grumman, general dynamics, all coming off those earlier highs on a bloomberg report that the pentagon is seeking a 20% cut in u.s. war funding to $51 billion. all of those coming off those earlier highs. sue, back to you. >> morgan, thank you. in this hour of "power," apple leading the nasdaq rally. the stock is trading on the upside by about just under 4%. it's already 1.5% higher for the year. honda ordered to pay $70 million to the u.s. government in penalties for failure to report hundreds of injuries deaths and other claims. and gm raising industry sales forecasts right as mary barra nears her first year as the company's ceo.
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which brings us to today's yahoo! finance question of the day. we asked you, as mary barra marks her one-year anniversary, what grade did you give her? 15%? 31%, 31%, and 23% said "d." ty? tension in washington over obamacare is continuing. this time it involves defining the length of a workweek. and who's a full-time employee. "power lunch" heads to d.c. next to tell you why it matters.
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the fight in washington over obamacare heating up again. this time it is all about the length of a workweek. hampton pearson is live in wash washington with that story. >> reporter: as we all know, the 40-hour workweek is the standard but it's 30 hours under the affordable care act. employers are 50 or more employees must offer health care benefit or face fines of between $2,000 or $3,000 per employee. well, the republican-controlled house is on the verge of passing legislation raising the mandate threshold to 40 hours a week.
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small businesses particularly the fast-food restaurant and franchise industry are strong supporters of the bill but even some pro-business conservatives say this particular cure could be worse than the disease. an analysis of data from the small business administration finds about 29 million employers at large firms work at least 40 hours a week while only about 7 million work 39 hours or less. a 40-hour fleshthreshold puts more people at risk. the cbo said half a million americans could lose their health insurance immediately. and the joint committee on taxation says another 1 million workers could end up on medicaid or the obamacare health care exchanges, increasing the deficit by $73 billion over the next ten years. the obama white house says the president will veto the 40-hour measure if it actually gets to his desk. sue? >> hampton, thank you very much.
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all right. the rally is intact on wall street. let's take a look at the numbers. we are off of our best levels of the day, but still a very strong market performance today. the dow jones industrial average is up about 268 points. s&p is up 31. the nasdaq is up 80 points. and the russell is participating, it's up 17 points or about 1.5%. there are many winners in the market today but a couple of them stood out to us. meadwestvaco and valero with strong percentage moves. meadwestvaco up about 5%. one of the reasons it's up is because oil has stabilized. even at lower levels it's still the stability in oil that art cashin has said the market is watching closely. that's basically moved the market to the upside today. we have west texas intermediate down 1.5%. brent down about 2.25%. but we're at those levels ty and mandy, that will be very interesting to see whether or not the oil market tests and
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moves through. and if it does we may see some of the steam come out of this market. >> all right, sue, thank you very much. and we talked last hour about some of the oil stocks that may be at buying opportunity prices. we're going to talk about that as well on "street signs" where i'm in for brian. sue, thanks a lot. >> that's right. i'll see you tomorrow. have a good show guys. >> you bet. and "street signs" begins right now. please make up your mind markets, after sulking in the corner for the start of the year stocks once again the life of the party, as we saw a moment ago, crude oil is finding a bit more of a firmer footing these last couple of days. welcome, everybody, to "street signs." i'm mandy drury, tyler, as you said, you're sitting in for brian sullivan who is off on a much-deserved vacation. >> i'm happy to be here with you guys. it's a pleasure especially on a very nice day in the markets. let's take a look at where the averages stand right now. with a little less than two hours left


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