tv Power Lunch CNBC May 9, 2018 1:00pm-3:00pm EDT
name >> energy. we talked about it of course a couple time. chen ear energy. a name that doesn't come up a lot, lng it's hitting 52-week highs from everything i am seeing right now it's going higher. >> great stuff thank you for being here. >> that does it for us "power lunch" starts knew. >> i'm melissa lee, here's what's on the menu a jolt to energy prices, oil prices moving higher after president trump's decision to get out of the iran deal 71 today and back to 3% on the ten-year and a big auction taking place right now. we will have the results plus we will talk about rape with the former number t-- talk. with the number two at the fed. >> what the requirement for solar panels on all new homes and what that could mean for already sky high construction
prices ♪ i'm going to soak up the s sun ♪ >> good afternoon. on a beautiful may day in the new york area. i'm tyler mathisen markets right now, dow up 150. walmart spending $16 billion on a big bet in india disney falling after its earnings report. those stocks are weighing on the otherwise positive dow more on those big stories coming up. and as melissa said, energy is the big story today energy giant exxon and chevron among the biggest dow gainers. energy by far the best sector in the s&p 500. >> i'm sarah eisen here's what else is happening at this hour. the department of transportation conducting an audit of the faa's oversight of both allegiant air and american airlines. this of course comes after reports of improper maintenance practices. france's president macron speaking on the phone with the president of iran today urging rohuhani to stick with the
nuclear deal even though the u.s. is backing out. sears striking a deal with am to install tires that are sold on amazon at its car care centers. more tails on that partnership coming up. three stories we are following at this hour the president meeting with his cabinet just a short time ago. oil prices are spiking that's fallout from the iran deal and the market reaction to all of this. let's begin with ayman javers, he is live at the white house in d.c. >> you mentioned the cabinet meeting that the president hosted here at the white house earlier today. during theet mooing he answered one of the key consequence on this iran deal, which is what happens from the united states's perspective if iran sees this as a signal to go ahead and restart its nuclear program. here's what the president said. >> iran will find out they are going the find out i don't think they should do that i would advise iran not to start their nuclear program. i would advise them very strongly if they do, there will be very severe consequence >> the president also offered an
update here on the status of those three american detainees who are being brought home from north korea by mike pompeo, the secretary of state >> we call them fine people, three really fine people seem to be healthy they will be landing at 2:00 in the morning at andrews air force base and i'll be there to greet them. mike will be with me it will be i think a very special time nobody thought this was going to happen. >> guys it should be a very warm homecoming at andrews air force base for those detainees tonight we will see what the implications are now of the decision to remove the united states from the iran deal on those north korea negotiations as well. back over to you. >> ayman, thank you. ayman javers at the white house. now to the oil markets prices spiking to three and a half year highs after the u.s. pulls out of the nuclear deal with iran. dom what's going on? it feels like a delayed reaction to the news yesterday. >> it is in a bit but there are
a lot of catalysts going on. oil prices are higher. you mentioned $70. west texas intermediatiate working on its sixth straight day of gains that propelled by president trump moving iran from the knew cheer deal now that it is a reality the bulls got more confidence after the weekly oil inventories report u.s. stock fell by $2.2 million barrels of oil the reduced supply helped drive the oil prices higher and affirmed some of the private sector data we got from the american petroleum institute last night with the smaller inventory they mentioned last night. nearly every stock in the sector group is i here. the gains are led by occidental petroleum, marathon oil and range resources. forget about 70 dollars. we are now staring at $71 and
change $71.15 right now. >> stocks rallying in the past hour energy, financials, and materials. bob pisani, on what's driving the action that we have just seen pushing higher. >> the market is rallying partly on oil mostly because we are breaking through a down trend in the overall market that's been going on for several months of the do you see that move up there we went through '022680 decisively we have been saying if you get above 2680 you break the down trend. what's the down trend. we have been talking about the descending triangle aers into of lower highs for the year we are breaking through that decisively once we did that ier today the market started moving to the upside it tounds like technicals are moving the market. it is. they are watching taflly semiconductors are also breaking trend. it was a leadership group that went into a downturn several
months ago it is starting to break that series of lower highs. banks have also started to may have been a little bit better recently there you see the bank index starting to peak up to a multimonth high. oil stocks, xle, that has been in an up trend since the middle of next month when we saw them moving on expectations of the iran deal getting canceled consumer staples still doing nothing, another multiyear lows. yet i look at them and say all of a sudden they have become dividend monsters. the s&p is only 2% yield look at these, some of them are 5% all of them are in 4%. general mills, kraft, p and g on the dividend yields. >> we have got a news alert in bond market. ten-year notes up for auction. we are joined by the managing director at tjm services >> it is a good solid auction. two weeks illinois offered ten
year bonds and people crawled all over each other to lend them money at 4.88. did i expect demand to be high the yields comes in at 2.995 everybody was buzzing about 3% didn't quite get it. it is a little better than expected indirect, 63.026789 that's good because the last four months indirect bidding, which represents foreign demand, was trending down. this bumps it up a little bit. primary dealers took down 28.66. direct took down 8.32. in the ten-year futureser this immediate grade of it was very good we rallied futures a couple of ticks. i think they are just saying it becomes ho hum after a few minutes of it. overall it showed good demand. >> the dow trying to keep its recent inwinning streak alive. a positive finish today would make it five for five, five
straight up sessions what is keeping the market marching higher, let's bring in benjamin siegel and omar aguilar. omar, welcome, good to have you with us. same to you benjamin let me begin with you omar why do you know the market has adopted a better tone in recent days >> well, i think earnings have been a big part of the driver of the story here i think economy is pretty solid, earnings continue to be incredibly positive for the market and i think overall the market has adjusted to the new levels of volatility. fundamentals seem to be driving even despite all the macro economic and all the geopolitical risk out there. >> bikini minute one might have thought that yesterday's announcement from the white house sort of stepping away from the iranian deal might have jolted stocks a little bit but evidently it was all priced in >> yeah, i think it's another case of sell the news and buy
the facts. >> and so what do i do with my money now, benjamin? where should i put sit in what are the best opportunities around the globe >> from a global equity perspective, the economic recovery in the u.s. is well underway i think we are in the earlier stages of development outside the u.s. and you have got much less wage pressures. you were talking about the ten-year in the u.s. at 3% i was looking at france this morning, it's less than 1% so we are still talking about low levels of -- relatively low levels of employment, relatively muted wage pressures in europe in particular, low interest rates. we think that's incredibly positive for the yut look for profits in europe which aren't being discounted to the extent they are here in the u.s. >> we thought maybe this ten year auction would be a coupon of 3%. the first in years
didn't happen. but still we are watching for rising interest rates. do you divert -- the way you do your asset allocation in this point in the face of potentially rising rates, are you changing it as a result >> i think that the yields is close to 3%. yes, it was kind of an interesting wait and see if it will be the first 3% since 2014 for a coupon to be in the bond market i think still, despite this, you know, we are in the face of new interest rates levels, and this is just a trend that will continue consistent with where we are in the cycle. i think as companies continue to look at the outlooks they will have to adjust to the new interest rates world and i think what is interesting to me, that we are coming at the same time with the reason why we are having higher yields is because of pressure on inflation. if you think about inflation being higher because of just the cycle itself, but on the other hand you have now a new oil price level that puts even more
price -- pressure on the fed going forward. >> more interesting to me sounds like more volatility benjamin in this environment and to michele's point when you have a ten year yield that yields 275% that ain't bad in terms of risking rinse pell all of a sudden cash is a real alternative to the stock market. where do you stand how would you take make the case against investors stowing their cash in bonds as opposed to stocks. >> if you do have inflation that can quickly erode a 2.5% interest rates you are not going to get much of a real return. you were showing the yields on consumer staples at well over 4% that's certainly more appealing with the prospect of capital appreciation certainly as we look around the world, we are seeing much better opportunities in europe with interest rates there low
you should expect weak u.s. dollar and stronger currencies outside the united states. when you get a local return in europe, in japan, in emerging markets helped by a solid all sector in those countries as a whole obviously are all exporters. for dollar-based investors that begins to look really quite compelling software engineering, factory automation these are all areas of industry where foreign companies really have a strong position and they are much less energy intensive economies, particularly in jurisprudence and particularly in japan. so they are going to be less impacted by some of the inflationary pressures that we see here in the u.s. >> omar i wanted to pick up on that theme skpk specifically on your view that global growth is better aren't we getting to the level with oil at 71 and brent at 77
when you start to think about the economic havoc that's going to wreak on global growth? >> when you look at the way that oil prices permeate into the economy usually there is a lagging effect where those effects eventually hurt either the earnings or the economy themselves in the rest of the world, ecb, bank of japan, they are still in an acome dating phase. prices will be connected on how they continue to see their monetary policies. with japan and europe, despite a little bit of a lapse on their growth they continue on the trend they set out to do and they continue to be very well positioned to continue its growth when you translate where we are in the u.s., solid grounds low unemployment higher housing prices. and 80% of our gdp growth is from consumers that are in pretty good shape so far. >> omar, benjamin, we appreciate
your time today. thank you. coming up, we will take you live to las vegas for a "power lunch" exclusive interview with fanly fischer. rising rates, the economy, and the role of the fed front and center. plus we are going to go inside the flbs on walmart's biggest deal ever. y e ey betting so big on india? "power lunch" will be right back anything worth pursuing hard work and a plan. at baird, we approach your wealth management strategy the same way to create a financial plan built to last from generation to generation. we'll listen. we'll talk. we'll plan. baird.
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shares of sears jumping as much as 22% after announcing a deal with amazon the company announcing it will offer full service tire installation for orders from all tire brands sold on amazon, including sears' own die hard brand. the customer would select the tires they want on amazon. the tires would then be shipped to a sears auto center near them sears has been selling merchandise from its die hard brand on amazon since december. call me crazy, but doesn't this seem like a huge move in sears? >> yeah. >> i wonder are we back to the days of the minute you added a.com to anything -- a dot com to anything your stock rose?
>> you buy from amtz and you go to sears. >> you wonder, would amazon get into the car business at this point? >> why not >> you can do that on line these days. suppose it drives traffic, literally, to sears. maybe they will go in and buy other stuff. i don't know >> dom chu has been waiting patiently with the market flash. >> die hard batteries and tires are probably one of the few thing people still go back to sears for on a mass market basis. remember, sears gets a cut every time they install tires or batteries. let's talk about what is happening with the vix the volatility index it's down about 6% right now this would be the fifth straight day of losses for the vix, indicating markets are preparing for a less volatile market going forward. something to highlight we saw lower levels in the vix intraday on friday however we are trending down towards that level we haven't seen since the beginning of february something to keep an aon. coming up, how walmart's
blockbuster deal with india's commerce -- make housing prices even less afford number the golden state. plus stanley fischer joins us from las vegas. that ine o"perun."s xtn ow lch when i first came to ocean bay, what i saw was despair. i knew something had to be done. hurricane sandy really woke people up, to showing that we need to invest in this community. i knew having the right partner we could turn this place around. it was only one bank that could finance a project this difficult and this large, and that was citi. preserving affordable housing preserves communities. so we are doing their kitchens and their flooring and their lobbies and the grounds. and the beautification of their homes, giving them pride in where they live,
man who knows quite a bit about rising rates the u.s. economy, from tis time as the second in command at the the federal reserve. he is with leslie picker in las vegas for a "power lunch" exclusive. >> we have got a ton going on on the geopolitical front we have got iran, north korea, the potential for a trade war. yet the markets seem to be shrugging it off largely when do you think these concerns and these tensions will actually trickle into the economy or will they >> if we manage it superbly, they won't have to usually we don't manage superbly for very long just because we are human beings and there is -- there will be an accident -- there could be an accident at some stage where somebody makes a wrong move. >> manage superbly how what should we be doing to make sure none of this actually spills over into the economy >> well we need the fed do it
its part well and i'm pretty sure that will happen. but we also need the people in charge of the political relations between countries to think about how the other side will react and try to minimize the feedback that you get from the measures you undertake. >> how do you evaluate the alliances where they stand right now, both on a trade alliance side as well as a geopolitical alliance side? are they fracturing at all given what we are seeing with iran given what we are seeing with the potential for a trade war? and how does that impact, you know, the ability for the economy to continue to grow? >> well, the -- i mean, the alliances aren't yet collapsing. on the other hand, when the largest and most important player in a particular alliance kind of checks out for a while, that's a very serious move and it could produce further
loss of coherance of the alliance. >> particularly china. i think a lot of people are focused on, already, tensions there, with regard to the potential for a trade war. does something like we are seeing in iran pulli, pulling of that deal, impede those relations even more? >> well, that's likely to impede progress with north korea. it may be a little less with china. the chinese are playing this very carefully at the moment and they haven't thrown their weight around yet. but they have a substantial weight and depending how we handle our side and how they handle their side we could get a fairly ugly situation at some point. i don't think it's the most likely outcome, but it's a possibility. >> i want to send it back to the studio sarah has a question >> hi sar.
>> hello base on what you are talking about, geopolitical tensions, oil prices are up 3% with the pulling out of the iran deal should the fed be more aggressive in its policy path this year, more than just three hikes, as planned? >> i think it's early to tell. it's got a program set out for what it plans on doing if it's going to change, it has some time to wait because the mex two moves are anticipated anyway and whether it does a third this year or early next we ayear, ths something you can decide at a later stage. i have to say the reason the fed doesn't only have one meeting a year is that thing happen during the year and you have to react to them reasonably quickly but we have got that flexibility
with eight meet agency year. and we can face that decision a little way down the road. >> how would you be reacting to what is happening across prices around this economy? is it getting to a worrisome level on inflation or does this look benign and healthy to you >> well, i mean, when i left, which was only six or seven months ago, all the concerns were, we are not seeing any inflation. i don't think we have seen a whole lot more inflation than we had at that time it's gone up we were all hoping it would go up that was probably built in to most people's dot plots. and so it is early days yet to know what is actually happening to the inflation rate. but central bankers who don't look at inflation and who don't worry about it can make more mistakes than they should. >> a lot of people look kind of historically, the last time that the jobless rate was below 4%, in the 1950s, 1960s.
1990s, they were followed by periods of severe inflation or financial bubbles that popped up is that a concern of yours as you look at all the different barometers in the country that we could find ourselves in a period where we are experiencing a risk of another recession to little tools in the tool kit to really get ourselves out of it. >> well, we could find ourselves in that situation, but it doesn't have to happen and we will just have to see what does happen if we are driven to that situation, then the fed will act. it's got a lot of tools. it has people who know how to figure out what they should be and it's done a pretty good job at least during the period before i was there and i thought during the period i was there. and they have a very good staff. they have a very good board. they have enough diversity of views because there are the 12 presidents of the regional feds. and i think they will find their way to good policies
>> very quickly stan, i just wanted to ask you about what is happening with emerging markets. because we are already starting to see money fleeing those currencies and so of that debt and those assets as a result of faster growth and inflation in the u.s how much pain is in store for em i know this is flight your wheel house. you have been through many emerging markets crises? >> well, this happened a little more quickly than i had anticipated. and now that one sees it, one sees a couple of countries -- i don't want to go into names -- which are closer to being in trouble and having to take strong policy measures than others but we are talking about a limited number of countries. as long as they take correct measures and as long as the imf is there playing its supportive role, the situation could be stabilized will it be stabilized?
well, it requires a lot of people to do the right thing at the right time and the right time is pretty soon for many of them. >> all right stan fischer, former vice chairman of the federal reserve, thank you very much. i want to send it back over to tyler. >> thank you very much. straight ahead, the latest salvo in the battle between walmart and amazon for e-commerce spres supremacy amount multibillion dollareal d that is walmart's biggest bet yet. "power lunch" returns in two minutes at half past the hour. so what else is new? how's your mother?
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hello, everyone. i'm sue herera here's your cnbc news update at this hour. president trump's attorney, michael cohen, says there is no truth to allegations he received $500,000 from a company controlled by a russian oligarch he disputed the payment as he left a new york city hotels earlier this morning. the department of transportation says it is conducting an audit of the faa's maintenance oversight of american airlines and allegiant air in the wake of media reports
of lax safety standards. this was found in a memo in the inspector general's office. secretary of defense james mattis telling a senate hearing the u.s. withdrew from the iran nuclear deal because it was inadequate long term he also said iran was propping up at assad regime in syria. >> he is still murdering his own people and creating refugee flows that we have not seen before based on the support out of iran. without it he would have fallen to his own people's revolt against him. you are up to day. that's the news update this hour guy, i will send it back back to you. >> sue herera thank you. let's check on our markets week we are seeing a big surge the dow up fatherly 200 points really this comes in the last hour or so the s&p 500 and the nasdaq each up nearly a full percentage point. energy the sector leader as oil spikes to a three and a half year high up 3%.
walmart agreeing to buy a majority stake in indian e-commerce company flip cart the stock falling 3% on that news. >> this is a dig beale for walmart. they are acquiring a 70% stake in flip cart $16 billion. among others, e-bay is going to sell its more than $1 billion stake in flip cart minority holders stay on those running the biz they are staying, too the board will change overtime amazon reportedly made an offer, possibly pushing up the ultimate price but walmart's cfo tells me the retailer quote paid what we thought was fair for this deal the earliest the deal could be approved is the end of the second quarter which is when you will see that hit to earnings. india and china are walmart's key stated growth markets. currently walmart only has 21 locates in india that sell only
the other businesses because of various indian government regulations that restrict foreign investment in a number of ways. those restrictions don't apply in the same way to an e-commerce marketplace like flip cart it's 11 years old. it has 54 million active users 100,000 sellers. we know this is the second biggest population country in the world. it's young it's increasingly mobile there's a lot of opportunity to gain here. they are going with a company that knows with what it has been doing because it is the largest when it comes to market share for e-commerce. >> is amazon the analogue to flip cart? how much business outside of india does flip cart do? >> amazon and flip cart are a little different although in india they operate very much the same because of those rules about foreign direct investment amazon and flip cart are more of a platform, a marketplace, almost more like an e-bay where
sellers can then sell to buyers as opposed to amazon owning or flip cart owning that merchandise that they sell because 30% -- you have to basically source 30% of your goods from india in order finishes if you are a foreign company in order to sell those goods back it's to protect the mom and pop shops the way that india works. >> how big are they outside of india. >> so far it just operates within india and amazon started there two years ago and they said it was the fastest growing prime adoption in a country to date. they were definitely gaining share but flip cart has been establish there had longer they could use some expertise from walmart they are kink to be worked out when it comes to shipping and customer service. >> solve the kinks. >> we will see. why is india so important to so many countries out there. what are the challenges to getting into that market seema mody joins with us that side of the story. >> tech companies are
increasingly looking to india fortunate. if the e-commerce market, it is anticipated to reach $200 billion in less than ten years torg to morgan stanley flip cart has 37% market share as compared to amazon's 30%. with the rt jo of the country connected to the internet on cheap local data plans indians are ditching web platforms and shopping more on their phones. on regulation, the commissioner wants to ensure there is no anti-trust concerns with this deal or job losses it is a crowded market while amazon has a smaller share in india's e-commerce market it is investing in a big way as is china's alibaba and ten cent third its protectionism from india's government prime minister mody is looking to get reelected in 2019 polls show it will be a tight race if he gives the green light to
more deals that hurt india's low to middle class that to impact his popularity. a tech investor joining squawk box this morning saying walmart's deal and their acquisition of jet.com demonstrates the company's ability to adapt to the future. >> the stall wart companies are on their heels what we have to figure out is how do they adapt? you have to use your balance sheet, oouk use your stock and acquire aggressively to be in the next generation wave businesses >> walmart stock is down 16% in 2018, down about 3% today. is this deal a way to stop the bleeding let's welcome back cart me reagan and jan rogers. what do you think this deal? the stock doesn't like it is >> the stock doesn't like it i love the deal. it is the biggest they have over
done, it is only $16 billion i never thought i would say that. >> is it worth at that to 30 cents of earnings in the year that they do it. >> i think what you will see is going forward on the longer term basis this is going to be the greatest deal ever there is 100 million users already of flip cart you can't let amazon own india you already have alibaba owning china. if you are going to be a world player on the world scene and you are going to be a winner on that stage you have got to be in india. seriously walmart wasn't in india seriously. now they are they can be fully competitive. there is plenty of money to be made here. over the short-term they will have los but they will make the business better. >> is it is the best part of deal that now amazon can't buy flip cart. >> exactly >> the walmart international story is interesting right now they just got out of the uk
grocer now going into india with flip cart what sort of narrative are you guiltying from walmart on their strategy as they try to compete with amazon abroad, which is still up for grabs jerry storch told thus morning. >> walmart's international business is important but it is about a quarter of the business. u.s. is 3/4. it is more important doug mcmillan used to run walmart international so he has a good understanding of what's going on there over time they have realized they need to focus on their strengths n. large part that means focusing on partnering with peel that know the market and know the market better than walmart. walmart came in there, and in a lot of cases in the international markets tried to do their own thing i just didn't work which is why i think so many people focused on the long term like this deal because this is a company that started itself there, it knows the indian market very well it has gained dominance. if walmart goes in and helps make it better that's way better than going the other way, starting and then get the inside
help to sort of help them. you know, they have changed the way they have done things in mexico and in brazil so they have really kind of taken a hard look at their international operations and moved things around. judith mckenna was just moved from walmart in an operating position u.s. and now she is running international. we see what they do going forward. a lot of big deals in a short period of time. >> this is obviously strategic as well as a tactical move what should walmart do next? >> there are three players, alibaba, amazon, and walmart they are going to divide up the world. >> a comforting thought. >> walmart has to continue to build that business on line. they have to be a dominant player in the states they can't give this away either they have to be the biggest competitor to amazon wherever they see amazon because they have to be in that space and winning that space on the other hand i don't think anybody can really compete with alibaba where alibaba is but if you are in there first and you have a bigger customer
base at least you have a fighting chaps, like in places like india. >> what do you make of the sears deal with amazon the stock is up, it's low so any move looks like a big gain >> it's not good enough to save the business but it is going to put value into die hard. the tire and battery centers that nobody would have ever bought might actually be somebody buying it now. >> because of the relationship with amazon. >> because now it would have some business. >> got it. >> simple as that. >> jan, good to have you. >> thanks, courtney. the ten-year yield right now around 3% today. what higher rates actually means for housing. plus a "power lunch" exclusive interview with liberty glob global ceo mike fries. "power lunch" will be back in two.
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welcome back to "power lunch. mortgage rates rising, not enough homes on the market and once again buyers are saying yes to riskier types of loans. diana olick joins us with all of that. >> competition for the slim supply of homes today means bidding wars, cash, and a tougher road if you need a mortgage interest rates jumped at the start this year, took a break and then rose again last month hitting the highest level in over four years. last week they fell back a bit but it didn't help much. mortgage applications to both purchase and refinance a home loan rates are up again this week, meaning buyers need to do more with less. >> the last 12 months
especially, more people are putting less money down, 3%, 5% is becoming more of the trend and more common, than the 20 to 30% doesn't like it was ten years ago. >> more buyers are turning to adjustable rate mortgages, which offered a smaller interest rates but were largely blamed for the housing bubble again getting in with less skin in the game than we have seen in the last decade. >> a major shakeup in the media industry bodia phone announcing a $21 billion deal to buy liberty global's cable operations in germany, roam in a and the czech republic joining us now in a "power lunch" exclusive to talk about the deal, the bidding wars in the media sways is mike fries the ceo of liberty global. great to have you with us here on "power lunch." >> good to be here
>> do you anticipate regulatory hurdle snz people are wanting to know what you are planning to do with the money you are going to get? >> we absolutely anticipate regulatory approval of this deal for starters it is a multinational transaction that involves multinational assets. and will be approved at the eu level. not necessarily in germany or any individual market. that's an important distinction. secondly it is a total win for consumers. germany is a market dominated by one operator, who we know here as t-mobile. they have over 50% of the broadband market and has been screaming for consolidation and a real national challenger today we will present a great opportunity for consumers. they are going the see innovation, investment, all kinds of benefits over the long haul we think it will be approved, should be approved it will take a year or so. the question has come many times, what will we do with the 10.6 billion euro of proceeds. the bottom line is i can't spend
money i don't have we don't have a designated use of proceeds today. as i said it will take about a year to close at least but i think our strategy will be the same, which is we are really focused on levered equity growth, and shareholder returns. if you look at how we built value over the last 13 years as liberty global we bought back half our stock we are likely to stay focused on those types of opportunities and we have done some smart m&a in europe that generated great returns for shareholders the playbook will remain the same but we can't tell you what we will do right now we didn't know where interest rates will be, stock prices all that stuff. >> the answer to my question was embedded in your previous comments there, but why are you selling? >> it is a premium valuation we are getting 11.5 times 2017 ebitda which when you see the cable stocks trading at seven is certainly a nice valuation for businesses that we have owned
and built for a decade or more secondly as i said, it is a big win for consumers. thirdly, this is not new for us. we are a very agile flexible rate operator in europe. this is not the first time we have rebalanced or reshaped our platform to sort of optimize growth and shareholder returns we did it before i think we are trying to be agile, smart, see the playing field clearly and long term this is going to be a great transaction. >> given what's going on here in the united states the potential bidding war for the fox assets plus sky, given the consolidation and the confluence we have seen amongst wireless cable as well as content, is it buyers or sellers market at this point mike good question. >> you said that you potentially engage in m, and a. >> in this one we are a seller. in the past we have been a buyer. it's all about scale whether you are a content player, whether you are a mobile company, whether you are a video
company, all the transactions you are seeing here are about scale. this transaction is about creating a national challenger with converged scale, meaning fixed and mobile scale and it's a natural combination so i think you are going to see that continue in europe see that in particular. i would point out that the ceo of telling le come is pursuing the same strategy. he's trying to merge mobil operations in holland and buying our business in aus tree yarks he's a big believer in this strategy, he's going to have a hard time taking both sides. >> i guess in a simple sense, there's a dichotomy between those in the distribution business and those mostly in the content business talk to us a little bit about that which is more important, distribution or content? you can't have one without the other. but do you need to have both to succeed?
>> that's a great question we're going through shifts they get everyone around the boardroom table wondering, where are we going to be in 10 years that's clearly about scale realizing this is a global business much content has to be built and distributed on a global basis i think it's a little defense. at&t wants to be sure it's hedged, but has great content for its millions of customers. it's a little bit of both. cable is really the catalyst, you look at our fiber based networks huge customer base strong product development. this is what we need to drive
synergies. not everybody's looking at it from their point of view, but the lens is the same have you to figure out where your alliances are >> do you find the valuation has gone up over the sky assets? would they be for sale if comcast is not successful in its bid for fox plus sky, it could be interested in the u.k. assets >> i don't know what comcast will ultimately be doing or not doing. >> it's called virgin media in the u.k. and ireland it's an incredible business. we have a great broadband network every day. we have a mobil business there, we already have 3 million mobil subs in the u.k., using bt's
network. we have all the content we have all the sports, netflix on the box. we're happy with it, and we're going to create great value over the long turn. we'll pick up the phone. at this point we're happy. >> mike, thank you ceo of liberty global. >> is housing going to get more expensive in california. state could pass a rule mandating solar panels on all new homes. that story coming up as we head to break, take a look at the market, stocks are high dow is higher by 206 points.
holiday inn express, mr. elliot, what's your wiwifi?ssword? wifi's ordinary. basic. do i look basic? nope! which is why i have xfinity xfi. it's super fast and you can control every device in the house. [ child offscreen ] hey! let's basement. and thanks to these xfi pods, the signal reaches down here, too. so sophie, i have an xfi password, and it's "daditude". simple. easy. awesome. xfinity. the future of awesome. a new rule being debated right now in california that would mandate solar panels that would be included in every home in the state >> reporter: we are in a new home community in freemont california, every single home behind me has solar panels and the energy commission in the state is hotly debating a
measure that would require all home builders to put solar panels in all new homes. this would take place in 2020 if passed it would include all residential homes, including apartments and condos that are under 3 stories or lower this would add on about $9500 to each home in construction costs. but there would be an energy savings of $19,000 for each home over a 30 year point i did talk to the vp of sustainability at kb homes they're backing this measure, about 35% of all homes they built in california over the last year, have solar panels on them the building association also backs the new standards. residential solar installations have declined 20% last year over the year before. >> tyler, back to you. >> aditi, thank you.
disney falling today after its earnings report. fox results out today. what that report could mean for the $60 billion bidding war for the company. power lunch is back right after this two minutes ♪ feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow. the kayak explore tool shows you the places you can fly on your budget.
here's what's on the menu. truck troubles ford could be forced to shut down one of the plants where the most popular truck is made what it could mean for sales and the bottom line. one money manage r -- are sales living up to the hype. >> the second hour of power lunch starts now it would be great, wouldn't it >> welcome to power lunch, i'm michelle caruso cabrera. the dow is up for the fifth straight day longest win streak since february had been hire by more than 200 points the nasdaq hire by 68. as we mentioned, oil, the big mover, jumping to the highest
level since 2014 accidental, devin marathon are your leaders, moves of more than 4% specific stocks. trip advisers leading the s&p on strong earnings. toyota is strongest by forecasting a drop the fda says there's a shortage of the company's epipen. >> we begin with three big stories we're watching at this hour phil lebeau on the ford front. julia looks at the media wars as disney falls and fox gets ready to report. we begin with bob. >> tyler, i think something important is starting to happen,
bulls are finally starting to regain control of the narrative. q-2 economic data, generally better, starting with the jobs report inflation has remained moderate. that was a major worry for the bulls. earnings, no drops in q2 numbers. you can have growth as long as you have -- earnings can be slower as long as you have growth leer. >> what we decided to go over 2680, the volume picked up, we're breaking the down trend. three months now we've been in a series of lower highs for the market big sectors like semiconductors. stocks are back, they have been in a modest uptrend for the last week and a half and in it again today. >> before we go. we want to make sure people did
get to see these pictures of you. and your brother from another mother shaquille o'neal opinion. >> and let me tell you bob is no little guy >> he's short. >> what are you, 6'1", 62. >> i'm 6'0" exactly. his hands are bigger than my head >> i'm not joking. it's kind of awesome he's one of the nicest men every year i talk to him, every year he's the heart and soul of the btig charity event he takes pictures with all of the kids. he's a wonderful man >> the dow is on pace for the fifth day of gains the nasdaq has gone for a fourth day in a row is the rally back on
michael farr, president and ceo of farr miller, a cnbc contributor. the best win streak for the dow since february >> pretty good day many i think the markets are getting used to volatility and i think they're getting used to this headline news for this threat yesterday we had secretary pompeo negotiating as we do today in north korea and pulling out of the iran deal in the same time i think markets are processing it, stock markets are behaving in a bullish way >> we did see that big rise offer the back of those comments some might be surprised to see the strength given president trump exited the iran deal
yes it was unexpected. but it creates an uncertain world. >> i think oil is separate from all the underlying good stories we've had first quarter annualized growth. we've seen wages grow at 2.6%. we've seen unemployment now at its lowest since 2000. i would go so far as to suggest we're at the beginning stages of a new bull market. this bull market is going to be driven by earnings growth. >> you're not afraid of rising rates? >> no, i think it's a good strong healthy economy >> you could take a look at oil. oil he says play be separate maybe it's not separate. we've seen a rise even prior to
this whole concern about pulling out of the iran deal here. we've seen oil rise, seen interest rates rise. are these signals telling us the economy is stronger than what the market is telling us at this point in time? >> i agree with you i think oil is separate. it creates a little more instability in the middle east we see those prices go up. the interest rate thing is a completely different risk. the interest rate thing, i'm not -- i like what kevin said, but it does scare me a little bit. i wish i had his courage i don't. the spread between the two-year treasury and 10-year treasury. we're somewhere around 46 basis points right now what the fed is doing here as they continue to tighten, i think they can tighten too much. i think they can choke out
growth and it has me nervous the economic growth and earnings growth are robust. they're in a bit of a battle my money like warren buffetts could earn more stocks >> thanks for weighing in on today's strong market action breaking news out of washington >> at&t sent a memo to all of its employees explaining its role in news that broke last night. at&t is painting this as business as usual. early 2017, as president trump was taking office. we hire several consultants to help us understand how the president and his administration may approach a wide range of policy issues. including regulatory reform at the fc c companies hire
consultants for these purposes especially at the beginning of a new administration they saecoen was one of these consultants. and the contract expired at the end of his term. the media first reported and at&t first became aware of the current con electroserscy surrounding cohen many this memo is silent on is a headline from the dow jones news wire which reports cohen was paid as much as $600,000 in 2017. that's a much higher figure than the $200,000 number reported last night painting this as typical consulting, typical way a company would want to understand
an incoming administration >> definitely told them what they thought about at&t purchasing them. >> were there meetings, were there consultations. what was that, and who authorized this payment, and who suggested it in the first place. >> lots of questions thanks >> you bet >> there's a parts shortage. >> if you don't have parts, you can't make your most important vehicle. ford has halted some production of the popular drug. we could see it stopped at the dearborn plant it all has to do with a fire and a supplier that makes component. the supplier has a plant in central michigan, it makes instrument panel components. working with ford to
re-establish production as quickly as possible. when that will be remains unknown. it raises the question, what happens with the f-150 inventory. will sales be hurt will dealers run out of these trucks it is the best selling vehicle in the u.s ford has a pretty nice inventory built up of the f-150 so that if you're looking at these trucks and you're saying does a dealer need to get new supply any time soon, they're probably okay. you go into two weeks, three weeks. this is a fluid situation they are working on you don't have these components, you can't build this truck this is a critical truck for ford >> that's a problem. thank you. >> disney shares lower today the company facing a possible bidding war with comcast over some of fox's assets as fox is getting ready to report earnings tonight. let's bring in julia borstyn
from los angeles >> it's worth meeting that disney beat expectations on the top and bottom line for the second quarter that was thanks to theme parks and the movie studio disney shares are lower today. here's what ceo bob iger said when i pressed him on a potential bidding war. >> i'm not going to speculate at all about either what they're doing or why they're doing it. i can only say and reiterate as you know, we made a deal in december that received unanimous approval, which is important by the 21st century we're in the process of filing what we need to file to gain both regulatory approval and shareholder approval
we're excited about that and confident with it moving forward. >> disney does not rely on the potential fox deal fox reports its earnings after the bell we'll see what they have to say about comcast business interest. analysts expect fox revenue to drop over 2% and its earnings per share to drop 1%. we'll be listening for any insight into m & a here's what's coming up on power lunch. he called central bankers stewards of the common good. and it's critical they continue to be. sir paul tucker joins us straight ahead it's the sale of the century, bidders from 34 countries bidding on a piece of the rockefellers last night. a look at how one of america's largest malls is getting shops and shoppers in the door
sure. mom,what's up son?alk? i can't be your it guy anymore. what? you guys have xfinity. you can do this. what's a good wifi password, mom? you still have to visit us. i will. no. make that the password: "you_stillóhave_toóvisit_us." that's a good one. [ chuckles ] download the xfinity my account app and set a password you can easily remember. one more way comcast is working to fit into your life, not the other way around. money, banking, power. sir paul tucker has seen it all. especially unchecked power
the people who controlled those financial levers the topic of his new book. welcome to power lunch >> thank you for having me >> there's a lot of critics of central banks in the world but think central bankers. do they have too much power in the world? >> some think they have. >> we need to give them clear objectives and clear strengths on their powers. that shouldn't have been a surprise they should have been -- >> you're saying you should not have been allowed to do so --?
>> firms are fundamentally best. there's no repairing them. >> it was one of the rules, it was. >> central banks should not be able to direct credit over here favoring one part of the economy over another part of the economy. they need to focus on the key mission of keeping the monetary system. >> what would have happened after the financial crisis aren't they largely credited with helping save the system with an all out collapse >> that's true too the elected politicians did much more, this time they stepped back -- >> they gave them a pass >> and let my tribe step forward. i don't regret anything. >> major central bank assets
just how much they've all got on their balance sheet. is that dangerous? >> it would be dangerous if it stayed that way forever. >> they need to run this down when they can. not in a rush, not in a way that suddenly brings back the problems many when they can, they need to get back to a normal sized balance sheet >> can that be done without major disruption i mean, people look at the massive rally they've seen as a result of -- they think as a result of quantitate everyone easing, and quantitative easing is rolled back, they think it's inevitable that you see a lot of assets first >> some of it can happen as the securities mature. i'm not against when the time comes, the fed selling some assets, but they're going to have to take care of the core of the financial system has enough capital to weather the volati volatili volatility, they shouldn't be frightened of the volatility, they should be sure the firms can weather the volatility
>> are you in fear of the central banking. have you president trump criticizing janet yellin it feels like we're getting close to that. >> it's always tempting, for any president, any prime minister any chancellor of germany, and you can put, they can put pressure on through the media through public opinion and the central bankers protection is the clarity of their objective. where the edges are fuzzy, bligss can exploit those fuzzy issues >> the traditional way politicians have intervened is to pressure them to keep interest rates lower >> however, what has been tremendous criticism in this country is that they've kept interest rates too low, and led to a misallocation of resources and capital in ways that never would have happened and shouldn't have happened as being detrimental. >> i think it would have been
better in this country had there been more fiscal stimulus going back half a decade it's kind of ironic, the fiscal stimulus comes now >> as the monetary stimulus goes away >> just as the economy is recover nicely >> after the initial crisis in 2009, politicians didn't want to do that. i'm a foreigner, but infrastructure 1k3e7bded in this country would have been a good thing. >> do you think central bankers have acknowledged the tradeoffs of what they've done it seems we get push back when there's a criticism that acid bubbles have occurred. capital has gone to areas where it wouldn't have gone, where i hear people say, i put my grandmother in high yield. there were tradeoffs for what happened, and they could be costly >> i would rather they said, we had to make some big choices to
save this economy. there were some side effects that aren't great. better we acted than not acted >> do you think any of this is going to get done? no one is talking about changes to central bank policy >> yeah, i think you can affect the climate of opinion if you go back 20 years, people thought differently about it than they do now >> you started it with this light beach reading. 500 plus pages of. >> it's a sad beach. >> thank you good to have you on. his book is called unelected power. tyler? >> taking it to the beach. >> from expensive art to china, the cufflinks. we got a sneak peek at the rockefeller collection last week robert returnings now with an update on this exciting auction going on right now
♪ if you need those rockefeller cufflinks you can't always get what you want, can you? we've been following for you for about ten days now, last night's auction of collectible art blew past the estimates, and robert frank was there, and has the details. >> i'm going to be lucky if i get a lamp at this rate. we're bidding for a piece of the rockefellers christie's sold 44 pieces, the best ones from the rockefeller collection for a total of 446 million. that's 100 million more than the estimate
the most expensive sale last night as expected was picasso's girl with flower basket, that sold for 150 million just over its $100 million estimate it's now the second most expensive picasso ever sold. the big moment, the most exciting moment of last night i was there. this water lily painting, came on the block, estimated at 50 million, here's what lapped. >> 75 million. and you're out thank you for that tremendous bid. here it is, you have it. >> you add in the fees another painting that was interesting matusz's reclining nude that went for 84 million >> you had your eye on those
cufflinks and the money? >> yes >> what's the story. >> the cufflinks were estimated at 4 to $600 million they just sold, they sold for 16,000 -- or $13,000 final, and then the -- the money clip, which is estimated 800 to 1200 that sold for $75,000. about 75 times. >> these what everyone wants to know we're going to have a very special guest from the rockefeller family who will tell us what this has been like for them to watch this process >> fascinating stuff let's get over to you are sue herera >> president trump hailing the release of three americans detained in north korea, the plane carrying them and secretary of state mike pompeo
landing at an air base in japan. they are scheduled to land in the u.s. very early tomorrow morning. ford is facing a shortage for its best selling and most profitable truck production has been crippled after a fire last week at a parts plant in michigan. that could force ford to temporarily lay off thousands of workers until it can get assembly lines working again an 11-year-old girl jumping out of a car jacked suv in suburban chicago her father has been trying to stop the car driven by the carjacker's accomplice the girl and her father were reunited right there neither were hurt. the carjacker was arrested following a brief chase. the accomplice is still being sought. a blue diamond expected to sell for $5.3 million will be up for auction at sotheby's next week it's more than six karats and
has been passed down through six generations of european royal families over the years. melissa, back to you >> not bad >> it's like the titanic 12k3w4r we're just off a session highs. we have the dow up by half a dozen points energy financials materials are the leading sectors here, telecoms and utilities no surprise they are lagging general electric, dow, dupont, exxon and merck. the oil market is closing for the day. let's go to dominick the center of the action today >> what we have now is the gains holding west texas intermediate. we're going to close near the best levels of the day wti about 71.08. crude futures, 17.14 now that the u.s. exit from the
nuclear deal with iran is in the books, it's fair to say geo political risks are more elevated than they were before you add to that some of the more bullish inventory reports you got from the private sector. fewer oil supplies are existing now over the course of the past week and you get the highest crude prices we've seen since november of 2014. we have regular unleaded gasoline prices. about 20% higher than it was the same time a year ago back then, 2.34. back over to you >> thank you riot block chain which saw its share skyrocket after changing its name from a biotech to a block chain company held its first shareholders meeting today. cnbc was there, the company would not allow cameras inside the meeting. we caught up with john o'rourke afterwards, the company disclosed it had received a subpoena from the sec. we asked o'rourke what the sec
is looking for >> i cannot comment on this. we received a subpoena april 9th. we don't know the results of the investigation. >> red flags about the company, including cancelling two annual meetings, the day before they were supposed to be held today's meeting was supposed to be the annual meeting. they announced they were postponing it yet again until next month the company is facing being delisted by the nasdaq because it hasn't held an annual meeting yet. next month's meeting will be in full nasdaq compliance. turning etaylors into we taylors that is what one of the largest malls in the country are planning to do the rise of the robots how to future proof your portfolio.
♪ ♪ and don't forget who you're really working for without it. ♪ ♪ funding to help grow your business... ♪ ♪ another way we have your back. ♪ ♪ the powerful backing of american express. don't do business without it. mr. elliot, what'sking your wiwifi?ssword?. wifi's ordinary. basic. do i look basic? nope! which is why i have xfinity xfi. it's super fast and you can control every device in the house. [ child offscreen ] hey! let's basement. and thanks to these xfi pods, the signal reaches down here, too. so sophie, i have an xfi password, and it's "daditude".
a record number of bankruptcies and malls having to fill empty stores here's a look at the major retailers that have recently filed for bankruptcy look at all of them there. let's get some perspective from steven leibovitz, president and ceo of the third largest mall operator in the u.s. we had fun the last time you were here, didn't we >> it's great to have you back >> great to be back. >> it's better this year, 2017 was a tough year with all the bankruptcies, but 2018 is off to a better start our sales were up over 4% for the first quarter, the bankruptcy activity there's still some, but it's come down, and we're seeing activity from a new generation of retailers and new types of uses. >> what are you doing to infuse new energy, new life into the mall we hear about theaters going in.
fitness facilities going in, experintial places going in, not necessarily a place to buy goods. >> 70% of our leasing was nonapparel we're bringing in fitness, service, all types of new uses that are going to create the experience for the customer that will bring them off their couch and into the property. >> when you first started in this business compared to what's lapping now. how has it changed, what's going on inside your malls >> it's always been a business where there was changing uses. most of the retailers when i started, don't exist any more. >> there's always change, there's always different types of uses going in the model is different now, in the past it was department stores with an enclosed mo mall. now we're doing more restaurants on pads, entertainment,
different kinds of uses, it's a different mix in the mall today that it takes to attract the customer because of the changing demograph demographics, and also, because online, online is a huge change that didn't exist when i started in this business >> are you starting a new pop-up store? >> we're doing a lot with etailers who are realizing they need physical locations. we're just working with a number of them, we're working with 25 different etailers, doing a partnership with rachel roy to open their first stores in several of our malls we have our big industry convention coming up the week after next in las vegas. and rachel roy will be doing a pop-up. >> rachel ray or rachel roy? >> she's a famous actor, model, designer >> not the chef. >> no, not at all. she's very talented fashion designer, big on social impact
empowering women, she sold at macy's, lord & taylor and in order strom. now she's looking to open her own stores. >> if you had said lebron james i would have known >> you have about 120 properties right now? >> exactly >> how does that compare to five years ago? >> we've sold about 30 properties over the past few years, includiing 20 malls, we slimmed down we're focused on the quality of our portfolio. we'll continue to sell some, but we're also doing a lot of redevelopment activity, in determines of converting anchor stores into other types of uses. >> your stock has come down over 20% over the last year, a lot of ceo's wouldn't do that are you confident there's anything in your power to turn that around besides some kind of wholesale shift, what's happening in retail? >> there's a lot of head wind we face coming out of last year this is a transition year.
we are recovering like i said, we've had less bankruptcy. activity has picked up we've seen positive signs as we move fword into this year. there's been a lot of head winds that have impacted the whole sector i think it's undervalued there's a huge opportunities in terms of where we trade and where the business is going ahead moving forward >> steven, appreciate you coming back >> melissa there has been a constant fearful drum beat about the rise of the machines. don't fear the rise of the robots, profit from them he runs robo global fund up over 23% from last year for more, we're joined by travis briggs this is an etf it tracks the performance of an index in which you have created. what gets put into this index? >> when we launched the index nearly 4 1/2 years ago, five
years ago in august. there was no system of classification, there was no way to determine what's a robotic stock and what's not so the first thing we did was figure out a way to capture the entire value chain of ai whey mean by that is, you want to capture everything from the technologies that are involved to the end use applications. the result was 12 sub sectors that incorporate the entire ecosystem of a.i that includes sensors, processing computing machine vision how do they move all of that is 50% of it, the other half is the end use applications like industrial manufacturing, health care. >> for instance, you have high wind technologies which produces ball screws and other things sensors, that's one end of the chain, then you have something like an intuitive surgical, which is the actual application of robotics in real use? >> that's absolutely right
>> what that allows the investor to experience is the broad diversified return that we think is coming to this space. now that we've been in it for 4 1/2 years, we know it's coming, it's been coming, we think it's only going to grow exponentially. >> why invest here and not just in the well known sexier names which everyone knows >> a lot of these companies are also getting into a.a. and robotics themselves. >> they've spent a lot of money helping them do that you think about where fang is, they have really captured the digital revolution, they've taken advantage of the internet. those are the winners of that revoluti revolution, where they've essentially created a lot of fun for consumers. and i think we're at that inflexion point where all that technology is going to move to the commercial side.
you'll have major advancements in health care >> we'll be watching this etf. travis briggs. ticker robo. we have a news break from phil lebeau. >> we're talking about american airlines and aleej end, the office of inspector general is doing an oversight investigation, taking a look at the practices of the faa in terms of making sure american and aleej end comply with safety protocol whenever there is a corrective issue needed. both american and aleej ant out with statements saying, is shocked to learn about the inspector general's review, we stand by our strong safety report our team is working to understand why we're part of the review as for allegiant, it will show what we know to be true, that
would you ever make a million dollar bet against warren buffett our next guest made the bet that his hedge funds would outearn the s&p. now he's here to eat some humble pie. take it away, lesley >> michelle, that's right, we're leer at the contact summit in las vegas which is a gathering of 750 investment professionals. i want to get to the buffet bet
in a minute. first, let me ask you about the markets today. the markets don't seem to be reacting to it that much, why do you think that is. >> it's always hard to know why the markets do what they do about if you look back last year to the surpris political events, brexit whatever the market response was, it was not quite right. the economies continue to be fine it's possible the markets are reacting to the nonevents of the past. >> the volatility, the regime that we've been seeing over the last few years has been detrimental to hedge funds which plays into that bet and that humble pie that michelle is talking about before with buffet now we're seeing the hfr index outperforming the s&p 500 through the month of april for the first time in 10 years is the bet that you made one that could reverse itself for the next ten years, given the trend that we're starting to
see. >> it's easy to grasp the word could. could hedge funds beat the market over the next 10 years, of course. those two are different things i talked about that ten years ago, and talk about it today hedge funds don't try to beat the market they're really trying to deliver a nice quitly like uncorrelated return could it happen? sure how might it happen? these types of market conditions, hire interest rates, more volatility, are more conducive for differential returns and security selection that's where a talented manager can deliver the value add that they try to for their investors. >> certainly some hedge funds try to beat the market that's the main purpose, that they tell their lp's of their existence, and the justification for bag the 2 and 20 fees. when you bet warren buffett, you took a basket of fund to funds and related it to what warren buffett was investing. is what you're saying that the
purpose of hedge funds has shifted over the last 10 years and that those uncorrelated returns are becoming much more of a value proposition for investors? >> that probably always was the purpose. i can't speak for the of invest most of the institutions and the institutions i talk to on my podcast really are focused on hedge funds as a way of delivering an equity-like return stream that has either less or low correlation to the market. that was the case ten years ago and it is today. to make that direct comparison to the s&p is a little bit of an apples and oranges comparison. >> even long short equity, you can't? >> again, it's not quite what hedge funds are trying to deliver. >> all right ted, good stuff. thank you for joining us back over to you guys. >> all right, folks. thank you very much. oil higher today as the markets continue to react to the president pulling the united states out of that iran deal
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energy surging today leading the market as crude oil topped 71 bucks a barrel let's head to the oil patch with the trading nation team today. boris schlossberg and michael bapis. the president pulling the u.s. out of the iran deal, how does it change the calculus for the price of oil >> best came from citi research. once i ran to you, now i run from you iran is what's driving oil at this point i think the story is not going to go away even if the tensions kind of ease, they're boiling on the surface. that keeps oil prices elevated for the near term. and therefore, things like mlps, oil and gas mlps may be an interesting bet on the long-term basis. i think oil stays big for quite a while. >> which is why you like the stocks michael, three and a half year high in terms of the oil close
what do you see for these stocks going forward? >> obviously there's going to be a geopolitical overhang for awhile we don't think it matters as much as it used to the u.s. has increased production in oil. companies like exxonmobil are focusing on good fundamentals, good dividend yield. and they've lagged the sector. we think there's going to be positive upside for exxon going forward. >> all right, guys thank you. for more market insights head to our website tradingnation.cnbc.com check please is up next. and now the latest from tradingnation.cnbc.com and a word from our sponsor. >> a double bottom is a chart pattern that suggests a down trend may be about to reverse. sometimes called a w formation a double bottom is when it forms two lows around the same level traders also view a break of the highest high in the formation as a bullish signal it took guts to start my business.
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check please >> this is a real life candy crush. a truck carrying tons of liquid chocolate overturned on a highway in poland and the result was a -- well, it was a mess is what it was. fire and rescueauthorities saying because the chocolate solidifies as it cools, it's very difficult to clear away and it will require massive amounts of hot water just turn it into a big fondue
luckily the driver only sustained minor njuries. but he did have a sugar rush nobody else was injured in the crash. lots of chocolate. look at that, man. >> what a waste of chocolate >> what a waste of good chocolate. >> they transport it in liquid form you would think they transport it in solid form a lot easier >> you add all that hot water, it's going to be a lot of hot chocolate on the roadway >> it will be. >> all right my check please, lennar. partnering with amazon so it's going to have new standard features in every home built that are powered by alexa. including wi-fi and door bells and smart locks and thermostats. interesting off the news amazon is partnering with traditional industries and brick and mortar and they're all getting the amazon boost we're getting amazonin every part of our lives. >> we also got news that they were not part of any of the winning applications for the
u.s. drone pilot program states had to submit applications but industry could join none of the states that amazon was involved with were picked. >> the government not giving permission to amazon for the drone pilot. >> i don't know what you're talking about, melissa >> thanks for watching "power lunch. >> "closing bell" starts right now. welcome to "the closing bell." i'm wilfred frost. equity markets shrugging off the oil near session highs i'm bob pisani i'll show you which sectors are likely to feel the heat from those twin threats in sunny fremont, california, i'm aditi roy. as the golden state gets closer to forcing home builders to install solar power. is the government going too far? i'm meg tirrell reporter on a life saving allergy medicine plus big earnings after the bell and why one tec
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