Transcripts For CNBC Power Lunch 20240622

Aforementioned yahoo . They were just talking about it. Well get you ahead of all of the trades. Mandy has gone down to the heart of the action at the New York Stock Exchange. Hi mandy. Its a down day, as you said but being driven by a few stocks as you mentioned. Ibm and United Technologies for more than 100 points of the dows drop. Bob pisani joins us here on the floor of the stock exchange. We did not color coordinate ourselves. But it looks good. A happy coincidence. The important thing is if you look at ibm and United Technologies, put them up for me, they are about 120 points to the drop in the dow that were seeing today so very very unusual action, and thats why the dow is much weaker, for example, than the s p 500. We are having a problem, again. So in the First Quarter, put up whats going on with United Technology and ill show you this. In the First Quarter the big problem for Multinational Companies was number one. Week Global Growth particularly china and secondly the strong dollar. United technologies is sort of the poster child for this. They have problems in europe. Europe with problems in otis and china as well. Put it all together and a big decline in their guidance. Thats the reason why we were on downside. Ibm slightly different. A decline in revenues going on for 13 straight quarters. Simply put. Cannot replace the losses they are seeing in the hardware and to a lesser extent the Software Division fast enough with the growth areas that, of course are things like whats going on with Software Services and other areas and, well Data Analytics and cloud computing. I want to show you whats going on elsewhere here. The big four that were big and have been moving the markets around the last few days. Kind of quiet today so well move on and note they are not doing too much. Finally the s p has not had a lot of energy until about 10 00 eastern time. The volumes are not energy. 32 declining in advancing stocks and its getting worse throughout the morning. Right at the lows of the day. Back to you very shortly. Meantime tyler ill throw it back to you at hq. Lets take a look at some of the sectors moving markets at this hour and there is the s p 500, down a fairly modest amount. Really just about ten points, about half of a percent, but you can see it has been a slide into the red all morning. The only sector curiously that is higher at this hour is energy, one of the laggards over most of the year so far. Financials are down. Material is down. Everything else is in the red. Consumer staples and bringing up the rear there you see telecom stocks. The smallest sector in terms of the number of companies in it but certainly verizon a part of it. And now lets move over to commodities because there is a lot of action there to tell you about, as you see, oil moving where is oil . There it is. West texas number 2 at 50. 46, yesterday it dipped down briefly below 50 and overall the xhodtics complex has been collapsing. Check out the index that tracks the crb sitting at levels not seen since the financial crisis there. Some of these numbers back to 2009, dominic chu. Dominic has been looking at which commodities are getting hit the hardest and which have resilience. Lets show you over the past of the course year because it will show you how bad its gotten over the past 12 months. Oil had the nearish term peak in june of last year. Going back to that time the crb, broader index of core commodities was 310 back then. Its languishing now at that 200 level so a real steep decline. Can you see the trend has been down significantly for that portion. We wanted to to dig a little bit deeper to see some of the weightings in the crb index. Take a look at this. Maybe no surprise the commodity we talk about the most on this network, crude oil, represents a 262 im sorry, a 23 weighting in the overall index. In the crb. Thats the biggest one. Thats the biggest one by far. 23 , 24 . Crude oil in that time span down through down by 51 so this is a big move. 20 of your index or more is regulated by something that goes down 50 . Its sunk. Two of the other ones two of the more heavily weighted one, 6 weighting in the overall index. Gold, gold prices, no surprise here. Weve seen just the price action down 15 over the past 12 months and also another one to watch as well. Besides just gold besides whats happening with crude oil, check whats happening with copper. Tells the macro story. Look at that. In a years time. Thats why basically youve got a onethird fall in the crb over the past year. Dom, thank you very much. Mandy, back to you. Will the collapse in commodities continue or is this a buying opportunity. For that lets bring in allen lockman, chief Market Strategist with bullseye option and paul chryst fer, head of International Strategy at the first very is very simple. Do you see further bearish momentum for the commodities complex from here . Its difficult to put all commodities together. Obviously there are going to be commodities moving up as the momentum in the market goes down. There are going to be opportunities, but i think were closer to a bottom here and if you remember, we had this conversation not long ago about crude oil and the cure for high prices in crude oil were higher prices because were at increased production. The same things happen for the commodities, finite resources, production and explore will slow. That will make these more valuable because there will be less out there, but i think the main drivers are threefold. Youre looking at the dollar. Youve seen the dollar increase 20 in the last year. Youre looking at chinas gdp, still fantastic, still at 6 . Well be happy to have gdp at 6 . Slowing down but coming off a higher based on that. Coming off of 12 , exactly, and then the third thing theres better Investment Opportunities in the stock market. Youve seen 1 billion come out of Commodity Funds in the second quarter, so those things are all working against the Commodity Markets right now. But you say that they are close to a bottom. Would you agree with that paul that they are close to a bottom or that they have got much further to run to the downside . I think we could see commodities, especially oil retest its recent low. We could see copper retest the 5,000 mark on the london metals exchange, but, yeah i do agree that we are seeing considerable and consistent cuts in output and analyst estimates of oversupply, and thats going to surprise the markets, i think, a little bit later this year. Okay. So if we take a look at all the commodities, and obviously every single one of them has their own supply demand fundamentals but, allen, if you had to pick one particular commodity to buy at this stage is there one in the group . Well, i was talking about the group, looking at the crb in general. Come down to this 200 level. This was a resistance back before 2000 so it should act as support on a macro basis, but individual commodities are a number with sharp, sharp declines. Crb has dropped 50 from its high. Look at Something Like coffee somewhere around the dollar level, come down from 3 sugar ten cents, coming down from 36 cents. Platinum i think is a better play because it has a limited marketplace as far as the industrial value. Platinum is somewhere around 800. Its dropped from 24 up so there are some that put the risk reward in favor of the bulls at these levels. If you can look long term and im an options trader so look at options with maybe a year of time. Right. Because these pictures can change. Always good to know. The time frame, right, depends what kind of trader or investment investor you are. Thank you very much for joining you us. Ty over to you. Members of apple users are having trouble getting into the app store and dom chu here are the news. The news is there is no resolution to this just yet. Like you mentioned, itunes apple owns around 12 of them. Have been hit with a Service Outage, illtimed given that apple will report its earnings after todays closing bell. In hour three of this Service Disruption for many Apple Services, apple music, also itunes and the app store, so we continue to see the Service Disruption happen. We will bring you more details as we know more. Again, were in hour three of the disruption tyler, so well see what happens as we get closer to apple earnings. Back over to you. And that dom, is exactly what were going to talk about now. Apple is among the big tech names and there are quite a few getting ready to report earnings after the bell today. The stock has been under pressure ahead. Numbers but it is up almost 20 so far this year 18 2 3 and apple reported record sales in china and with the stock market volatility and fears about the economy there will apples China Business keep booming the way it has been . Josh lipton is live outside of apples headquarters in cupertino. Hi, josh. Reporter tyler, i talked to apple bulls and asked them what worries them about this quarter. One they will talk about is a concern about a potential slowdown in china. Remember, tyler, when you talk about that Greater China region and by that we mean china, hong kong and taiwan that is a booming business for apple. Just look at that last reported quarter where sales there surged 71 to an alltime quarterly record of 16. 8 billion and just to put that number in some context the growth rates last quarter in the americas and europe clocked in at 19 and 12 respectively but now you do hear some wore business that business in the Greater China region. Theres really two concerns. One youll hear talk about how last quarter benefited from this peak shopping season. This quarter it wont. Also, as you mentioned tyler, we did see that swoon in the chinese stock market and the worry there is that leads to a slowdown in the broader chinese economy which could weaken apple sales. How much of a worry really is that for investors . Well, ubs says it will have a limited impact and they know that equities in china represent only about 12 of Household Financial wealth if property is included. I also did though catch up with pipers gene munster. Gene is a wellknown apple bull. He says these concerns about china cant be just dismissed and he is going to watch q4 guidance for any indication of a slowdown in china. Right now analysts want to see apple deliver eps guidance of 1. 86 on some sales of 51 billion. Guys, back to you. Thank you very much for that josh, live there in cupertino. Staying with apple, hiring another auto executive saying that apple may be developing its own electric car. Phil lebeau is in chicago. What more details do we know . Reporter this is intriguing because apple wont comment about what work its doing when it comes to developing an automobile or new programs for the Auto Industry but doug betts has an extensive background when it comes to the auto business. Who is doug betts and why does he matter . Hes one of the most recent executives to join apple. Changed his Linkedin Profile a few months ago to say hes working in apple operations. When he was with chrysler in 2007 to 2014 in particular focus what he did between 2009 and when he left in 2014 a member of the executive group council, part of the Management Team at chrysler and left last october just a few days after a very blistering report from Consumer Reports regarding the quality of chrysler vehicles. Now, they say at chrysler he left to pursue personal interests, but look at the quality ratings for chrysler when betts was there. They struggled. In 2012, 25th. It did improve in 13 and 14, but the initial quality ratings, dropped all the way down to 31st in 2015. Take a look at shares of apple again, the company will not comment on doug betts in saying what work he might be doing at company, whether its with the auto program or if hes working on some other product line for the company. And regards to that auto program, remember at the rico conference, analyst Jeff Williams was asked about what work apple was doing when it comes to auto. Heres what he says. The car is the ultimate mobile device isnt it . Look we we explore all kinds of categories and will certainly continue to look at those and figure out which ones are ones where we think we can make a huge difference. And remember apple is doing a lot of work when it comes to auto play the car play program which is a big part of what apple is doing right now. With regards to whether or not its developing a vehicle and whether or not well see more Auto Executives joining apple, thats the big question tyler and mandy. Doug betts among the most recent though who has said you know what . I think ill spend some time working out in cupertino for a while. All right. Been a good move for a lot of people. Phil lebeau, thank you very much. A 13 billion growth fund up 6 so far this year that beats the Broader Markets, and the woman behind that fund will join us with the best stock picks for this market. As we head out, a look at the big winners and losers from the nasdaq at this hour. Power lunch will join you in a quick two minutes. A new season brings a new look. A chance to try something different. This summer, challenge your preconceptions and experience a cadillac for yourself. Take advantage of our summer offers. Lease select cts models in stock the longest for around 399 per month. So youre a Small Business expert from at t . Yeah, give me a problem and ive got the solution. Well, we have 30 years of customer records. Our cloud can keep them safe and accessible anywhere. My drivers dont have time to fill out forms. Tablets. Keep them all digital. Were looking to double our deliveries. Our fleet apps will find the fastest route. Oh, and your boysenberyy apple scones smell about done. Ahh, youre good. I like to bake. With at t get up to 400 dollars in total savings on tools to manage your business. Running you through some of the headlines. Harley davidson beating profit estimates and revenue still short of forecast. Lexmark beaten on top line and revenue missed. The printermaker cutting its outlook for the full year and slashing about 500 jobs. And Wolverine World Wide constantly beating estimates and revenues well above forecast. The Retail Retailer has seen strong growth in emerging market. Shares there up nearly 3 . Ty, over to you. All right mandy, volume tilt index has taken a hit over the last week down 5 though its making a little bit of a comeback. Up 3 there. What happens to the bigcap stocks google and ale, for example, when volatility plunges . To down that is Vice President of eaton advanced management and Portfolio Manager of the focused Growth Opportunities fund. Welcome, good to have you with us. I hope im doing justice to your first name. You are. Thanks for having me. Im delighted. Lets talk about volatility before we move on to the market sectors you like best. You make a distinction between the yoyoing of the market which is one measure of volatility or fear and what you describe as the dispersion of returns within different sectors or categories of the market. Tell me why you think that dispersion is what more of us ought to focus on . Thats a great question. As active managers were really focused on stock specific fundamentals and north to assess where the greatest opportunity in the marketplace might be we have to dig a little deeper. Thats why we look at stock dispersions on an industry and sector level to try to assess where the biggest opportunity is. And right now what youre seeing is the greatest opportunity to be within the health care and i. T. Space which is great news for us as active stock pickers that focus on fundamentals. So when you say dispersion. Am i understanding it the way i would just basically think the definition of dispersion is, that if you drew a scattered diagrams of returns, they would be all over the place there. Would be some that were way up here and some way down here right . Thats right. So when you refer when we talk about the market and by the way, the market you know, a composite of a lot of different stocks and you think about vix, vix has certainly declined over the past even year and year to date its down about a third but its now approaching a level that seems to be seasonally normal, so perhaps this is the time where investors take a pause from all the macro uncertainty and actually focus on earings and given the fact that were in the midst of q2 earnings, this is the time for us to really understand and assess where the winners, those that have growth and losers are. If you look at this sector leadership to date can you actually see that health care and i. T. Are leading the market while energy is not and that dispersion between the best performing sectors and the worst performing sectors is in excess of 20 so thats what were trying to understand and assess. Where is the greatest opportunity where it pays to take the risk. Right. You say you Like Health Care and i. T. Are they particularly compelling when they intersect and is there any particular stocks that you could name that do actually show that intersection . Yes. So health care i. T. Is probably at the sweet spot right now as the industry is undergoing a Seismic Shift from fee for service to something thats more focused and valueadded service. Cerner is one of those caps, a largecap market i. T. That enables Company Supply the analytics and compliance and Revenue Management that can help them provide better value add to their companies. This is a company that has the visibility of most Largecap Companies would die to have. It has over 75 of its revenue thats visible, meaning its recurring on a subscription base. It has 13 billion in backlogs so theres a lot of visibility and we like that space and think it will continue to do well because of the trends its part of. Yana thanks for joining us today. Well have you back soon. Thank you. Only a matter of points away from the lows of the day but check out facebook shares. They are up about 26 this year and here is a real staggering stat for you. The social media giants market stack is now bigger than General Electric, so the question we have for you is if you had to buy just one of those in the next ten years, which one should you buy, industrial or a fastgrowing cuttingedge tech and speaking of techs, these techs are rallying qualcomm could go santd tech Texas Instruments and fs networks nicely in the green. Stay with us. No fifth graders ever sat at the cool table. But your jansport backpack is permission to park it wherever you please. Hey. 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In order to understand whats going on with any market maybe you can place the start of the 20year chart of the crb. Weve been talking about it for good reason but heres Something Interesting on the 20year chart. On left side a lot of tops right around 200 and change and on the right side you have a lot of bottoms there. Were not that far away. Thats the Technical Area to Pay Attention to. Now, we already had a good inkling, the equity markets around the globe would pressure rates lower. Look at the way they were trading even before we came in. Our sessions very much mirroring and correlating with that move. If you look at a twoday dollar index, yesterday we get our first close above 80 going all the way back to april, and today it failed there, as you can see. Last chart Interest Rates, two days of 10s. Yes, were close to 22. 40 plus and why because theres a lot of buying when you see down 212 on the Dow Jones Industrial average. Mandy, back to you. The major averages are having their biggest drop since july the 8th. Dow down triple digits. Currently sitting below 18,000. Off by 1. 2 209 pointsed to the downside, but after the bell well be hearing from three of the biggest tech players around yeah. Were talking about apple, microsoft and yahoo . Whats unique in those before you trade these stocks ahead of their earnings . That is coming up. When the moments spontaneous, why pause to take a pill . Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. 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Ah jeez its so close. He just loves her so much. Do it. Come on. Do it. Come on yes awww, yes that is what im talking about. Baby. Call and upgrade to get x1 today. Xco0 im Courtney Reagan and here is your cnbc news update. John kasich delayered his candidacy today at the Ohio State University claiming hes the only one with experience in the federal budget, national security. Hes the 16th republican to run for the presidency. The department of justice formally dropped its criminal prosecution of barry bonds, this after he said he would not challenge the reversal of his felony conviction to the supreme court. Nk says its not interested in iranlike negotiations over its Nuclear Program. Its staterun broadcaster says its Nuclear Program is a deterrence against hostile u. S. Foreign policy. And at least nine people were injured in mexico when members of two rival taxi Driver Unions unions clashed in the streets. Theres drivers driving without proper permits. Protesters are throwing rocks and tearing down tents and setting cars on fire. Thats a cnbc news update for this hour. Tyler, back to you. Thank you very much. Donald trump apparently didnt take kindly to an insult hurled his way by republican senator Lindsey Graham of South Carolina. Our john harwood has more from washington. Quite a week for mr. Trump. Reporter as much as the Republican Party wants him to donald trump is not going to stop talking. He showed that again today in South Carolina after Lindsey Graham, republican senator, rival for the republican president ial nomination called him a jack ass. Donald trump then called Lindsey Graham an indiot and said he hadnt accomplished anything and mocked him for soliciting Campaign Contributions by saying this. So Lindsey Graham says to me please, please whatever you can do. You know im saying to myself whats this guy a beggar begging me to help him on fox friends. I said ill mention your name and he gave me his number and i found the card. I wrote the number down. I dont know if its the right number. 202[ bleep ] i dont know. Maybe its three or four years ago so its an old number. 202[ bleep ]. So, i dont know, give it a shot. Now Lindsey Graham has released a statement in response saying that the only people happy about Donald Trumps campaign are barack obama and hillary clinton. He said its sad what donald trump is doing in this race and is not surprised anymore. Were going to be in for a considerable amount of this, tyler. Weve got the first Republican Debate on august 6 on fox in cleveland, and donald trump is assured of being there, and everybodys going to be listening to what the next verbal rocket is. John i heard mr. Trump last night interviewed by charlie rose briefly by telephone. He was a, unapologetic about his comments about john mccain, but he said by way of defense that mccain started it by calling his supporters whom he described as 15,000 people who had come to see him i gather in phoenix or in arizona as crazies. That was his characterization of what mccain said number one. Number two, he said that elsewhere in his remarks we softened he didnt really call him a nonhero. Can you clarify this for us . Reporter well, john mccain was talking about the comments that donald trump had made on immigration when he referred to large numbers of immigrants as criminals and rapists and not the best of society, and john mccain made a comment in an interview with the new yorker saying he was riling up the crazies, as you said. By crazies he was referring to the Republican Base thats most fervent on this issue that Many Republican candidates are tiptoeing around and trying to figure out how they can satisfy that group of voters without making themselves unacceptable in the general election and donald trump doesnt care about that. Hes going all the way out on that limb with them. Now, with respect to his criticism of mccains war record, he said both things. He said he isnt a war hero and then he said hes a war hero perhaps he was a war hero because he got captured so he was suggesting that that was the lesser kind of heroism so that is what everyone has been reacting to and weve yet to see any significant evidence that its hurt donald trump. Its gotten him more attention, but these things tend to play out over a longer period of time. All right. John, thank you very much. John harwood reporting. Mandy, over to you. Thank you very much, ty. The dow is sitting down by 221 points. Were sitting around the lows of the day here bob. Lets put up ibm and utx because those are the movers. Bear in mind twothirds of the reason why the dow is down and underperforming is because of these two stocks. Weve got bigger problems. The advanced decline line has been terrible, negative on friday and negative yesterday and negative today, and weve got some Leadership Groups stalling out. For example, banks have been a Leadership Group stalling out. Putting up a Regional Bank etf, the kre. That is now down today. Weve got a year to date and thats down on an intraday basis. Oil attempted to rally. Its come off its high. Thought perhaps wed have an up day on energy we are, but energy it rolling over and mining, a disaster all year, i thought maybe they would be up and they are slowly drifting down here as well, as you can see. Fractionally up much more earlier in the day. Always good to see you, bob. Over to the nasdaq and moving a little further uptown and bertha coombs, what are you watching there . Im watching the nasdaq 100 thats come within ten points of its alltime high close. Right now near the lows of the session. Definitely come back but some of the gainers here and the movers to the upside qualcomm up 2. 2 on reports that it may consider a breakup and google today topping 700. Well see if it closes above there. Thats an alltime high. Another alltime high today, facebook as well just shy of 100 here over the last couple of days and facebook on momentum doesnt report until the 291th. Tesla today is the drag the worst performer on a downgrade to a sell with ubs saying that its likely to sell fewer cars and be a heartbreaker in terms of its earnings. Back to you. Okay. Thank you very much, bertha. Joining us now, we have a couple of market guests. Bob pavlek and a chief investment strategist at raymond james. Thanks for joining us. Bob, you said using weakness on greek headlines, use this as an opportunity to accumulate, and i guess in the short term that would have paid off. What are you advising say, on a day like today . Buy again . Yeah stick with the overall market. I think the market is running up against a little bit of alltime high resistance. The s p didnt get there. The dow didnt get there. The nasdaq certainly did, and i think thats what we really see today. That, and, of course utx and ibm certainly weighing on it because its a price weighted index and the highpriced stocks really weigh on the overall index. I think if you really step back and realize were still very early into the earnings season. So, you know about 85 companies have reported the s p 500. Thats a very small percentage. So far about 70 of those 85 companies though have beaten expectations. 5 have lowered expectations. A lot of the expectations werent great going in right in the bar was pretty low lo. Lets face it, the revenue has been what it should. Absolutely. The revenue isnt great, and revenues are still going to be an issue. The stronger dollar is going to be an issue. The Federal Reserve is going to be an issue, but if youre a longterm investor youll look at the overall economy. Overall Economic News is still improving. The economy is improving at a moderate pace, the Federal Reserve is not going to raise Interest Rates until the economy can sustain it. The Federal Reserve is going to actually do that. People will realize that growth is the place to be and they are going to be transitioning out of fixed income and out of high yield securities and they will be owning the securities. Jeff, heres a question for you. Talking about commodities a moment ago, but from a stock perspective has the recent leg lower in commodities surprised you, and, number two, what does it mean to the overall stock market . The weakness in commodity does not surprise us. Weve been shy of commodities for a pretty long time now. I did, however, earlier this year say i thought the lows were in in the crude oil complex with joe kernen on his show back in march and i do think that low water mark of 42 a barrel will hold up. Your other guest, i agree with just about what he said. We did right the past week. Market had used up its internal energy and wed probably get a pullback into midaugust and allow the internals to get rebuilt which ought to set the stage for a whole new leg to the upside. Leg to the upside so ending the year higher than where we are now . Is that what youre saying jeff . Thats exactly what i say. Earnings strength in the back end of this year. Earnings are coming in above expectations. A weak or so ago they were expecting secondquarter earnings to be down about 5 miss and now they are expecting them to be down about 3 but if you look at what happened so far with the companies that report it had looks to me like they will be up 2 3 and i think that will surprise a lot of people. Bob and jeff good to talk to you. Thanks, mandy. You can go to powerlunch. Cnbc. Com to see why bob and jeff think the market is not over. Down by 217 points on the dow, but, again, really only a few stocks to blame in particular. Over to you. Lets take a look at that earnings scorecard. Just mentioned about 88 companies so far have reported earnings. Thats 16 of the s p 500. Lets take a look at how things are shaking out. 70 of those 88 have beaten estimates, and again, as mandy points out the estimates have been lowered. The bar is pretty low. 10 met expectations and 20 , nope, below estimates. Big afternoon ahead of three tech giant reports after the bell. There you see them. Recovered it all. Julia boorstin on yahoo and josh lipton on apple and Kayla Tausche on microsoft. Julia, you get to go first. The thing everyone will be watching is earnings numbers for yahoo earnings per share expected to drop 50 on revenue thats protected to come in just a hair ball the yearago quarter. Perhaps even more important than that top and bottom line number is the update on the alibaba spinoff and the likelihood that yahoo will have to pay taxes. The third key topic to watch is whether yahoo can maintain 50 plus growth so what has been called the companys mavens. These are the key areas where yahoo is committed to growth. Mobile, video, native and social and, of course tyler, with yahoo shares down 20 year to date and on the heels of google delivering a huge beat on earnings which sent google shares skyrocketing, the pressure is on for yahoo to deliver. Back over to you. And we will find out after the ball. Apple also reporting after the bell. Josh lipton, what are investors looking for there . Well tyler, really three things to watch for apple. One, apple is of course the iphone company. That product generates more than 50 of the companys total sales. We know the 6 and 6 plus have been big hits but can caple keep the momentum going . Expectations are certainly high going into this report. Piper jaffrey thinks apple sold 49 million iphones in the quarter. That would be a jump of nearly 40 year over year. Second, tyler, that Greater China region thats china, hong kong and taiwan its been booming for apple, and that last Quarter Sales there were up more than 70 , but now you do have some worries, specifically that tumble in the chinese stock market and whether that will have a Ripple Effect into the chinese economy and hurt apple sales. Finally, a lot of interest of course, in the new apple watch. How is it performing . Remember, apple in this report. They are not going to break out apple watch shipments. Instead instead, analysts will have to do their best to try to guess how much money they think apple is making from this new device. Tyler, back to you. Well interrupt the playbook for just a moment and go back to dominic chu with a little more news about apple. Right now Apple Services are back up and running. We told you earlier, were about 3. 40 into the Service Outage that just got resolved. A little before 10 00 a. M. Eastern time some of their Service Applications all went down with Service Disruptions. Apple said it was working on the problem. Right now as you can see on apples website, Devices Services and support page are indicating that all the items there that were affected are now up and running and are now fully functional. You can see there, a lot of green there indicating that the systems, 12 of them including the itunes store, apple tv the ibook store, all of these types of applications and services were disrupted at one point and are now back up and running. Again, nearly four hours, but apple says its back up and running and all of this ahead of their earnings report. Back over to you. Thank you very much dom. Finally lets get to microsoft earnings out after the bell. Kayla, whats the buzz . Microsoft already said it would take a giant restructuring charge that writes down the moment of its nokia acquisition. Its laying off 8,000 people as it eyes its newest fiscal year so investors will be focused on what operating expenses look like in the most recent quarter and what they are guided to in the coming year as microsoft continues to try to transform its business. We know that some of these issues at microsoft, notably the pc slowdown have been in place for some time but new numbers out of ibc and gartner show the deceleration in the next quarter was quicker than expect the and exactly how that affected microsofts bottom line is something that investors are keenly focused on. Finely as pc sales are slowing how can microsoft make up some of that lost revenue from other units. Normally the commercial cloud unit and piper is expecting an 21 jump there. It also includes its very popular and noteworthy as your cloud unit and that has been where microsoft has been placing a lot of investor hopes as it continues this mobile first, cloud first new mantra tyler, as the Company Continues to reinvent its company as such. Thank you very much. Mandy, down to you. Thank you very much. Wall street putting a dent in tesla shares following a really big downgrade, another downgrade. Well have more on that call ahead. Plus, as we head out, lets take a look at how stocks are sitting currently around tesla lows. Just a few points off. Harley davidson and Console Energy though are the biggest winners. United tech and chesapeake energy, the biggest losers. Dont go away. Well be right back. It took Tim Morehouse years to master the perfect lunge. But only one attempt to master depositing checks at chase atms. Technology designed for you. So you can easily master the way you bank. No fifth graders ever sat at the cool table. But your jansport backpack is permission to park it wherever you please. Hey. Thats that new gear feeling. Now get a swiss gear backpack for only 10. Office depot officemax. Gear up for school. Gear up for great. The mercedesbenz summer event is here. Now get the unmistakable thrill. And the incredible rush of the mercedesbenz youve always wanted. But you better get here fast. Yay, daddys here here you go, honey. Thank you. Because a good thing like this wont last forever. See your authorized dealer for an incredible offer on the exhilarating c300 sport sedan. But hurry, offers end soon. Share your summer moments in your mercedesbenz with us. Hi everybody. Lets get a feeling of whats happening here on the floor as the markets continue on the downside after a number of weaker earnings reports. A number of stocks causing the damage in the stocks. Great to see you, guys. Kenny, rather than a particularly weak day, handwringing like this is this quite a big giveback after a very good move since july 1th . I think if you look just at the dow and it looks like its down you know 200 and change everybody gets a sense, oh, my god. You said it. Its five names that are really dragging most of the dow down. The Broader Market the s p is down half a percent so its not really nothing more in my mind than a little bit of profittaking and people kind of positioning after that nice move. Intermediate fairly light volume as well which exacerbates the move . Would you agree with what kenny just said . I can never agree with him. Throw another theory. Im very nervous. Still longterm bullish. Have we had a signature correction it a add to the Overall Health of the market . Id be buying vix in anticipation. Yesterdays leadership was very narrow and focused and today the same thing on the way down. Thats not very healthy for any market. Are you say were due for a correction . I can only say i hope so. I dont think corrections are bad things. I go back to you need to prune the rose bushes if i want them to grow. The same thing in the stock market. We need to see some sort of pullback and the the interday activity were seeing is not healthy. Yesterday anything that was being bought yesterday is being sold. Today the only the plus side is the Energy Sector which is a very unusual. I think thats a knee jerk reaction particularly to oil so im not really convinced. Ken . Make the point p. Over the last couple of weeks they had ever reason to really start that correction where were trading down at the 200 day and we found plenty of support there. Once they got there not a sense of panic and used that as a bouncing point and jumped right off. The internals of the market is what im concerned about. Did have a little bit of retracement. Been in this bandwidth so much and well be there until we not and it will break to the downside and not the upside. The leadership getting narrower and narrower. Absolutely. Thanks so much kenny and ben. The top pick you didnt even know existed. We call it the real estate of tech. Well explain what that is. And take a look at the dow 30. Just two stocks in the green, chevron and travelers trailing ibm and utx. They are the big drag on that index right now. Thanks to the tools and help at experian. Com, i know i have a 798 fico score. [score alert text sound] [score alert text sound] oh. Thats the sound of my Interest Rate going down. According to this score alert, my fico score just went up to 816. 816. 816 816 fico scores are used in 90 of credit decisions. So get your credit swagger on. Go to experian. Com become a member of experian credit tracker and take charge of your score. 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Who is buying u. S. Properties and whats the impact on the luxury market . That is ahead in the second hour of power and a look now at s p 500 sectors as we head out and as you see there, there is no green on the wall today. Hi my name is tom. Im raph. My name is anne. Im one of the real live attorneys you can talk to through legalzoom. Dont let unanswered legal questions hold you up, because were here were here and weve got your back. Legalzoom. Legal help is here. 40 of the streetlights in detroit, at one point, did not work. You had some blocks and you had major thoroughfares and corridors that were just totally pitch black. Those things had to change. We wanted to restore our lighting system in the city. You can have the greatest dreams in the world, but unless you can finance those dreams, it doesnt happen. At the time that the bankruptcy filing was done, the Public Lighting Authority had a hard time of finding a bank. 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Im one of the real live attorneys you can talk to through legalzoom. Dont let unanswered legal questions hold you up, because were here were here and weve got your back. Legalzoom. Legal help is here. Will iphone sales continue to power apples numbers . Early reactions to the results plus mr. Doom and gloom mark fabers predictions for the bulls and bears. Thats tomorrow on squawk box on cnbc. Im Brian Sullivan. More on what is driving our market down in the next hour. Plus, we are teeing up up for a flood of tech earnings hitting the street after the bell. Were talking apple, yahoo and microsoft after the bell. What one analyst is telling his clients and why to pump the brakes on one favorite stock break and with one Big Energy Company slashing its dividends, are others ready to do the same . Well show you the stocks that are the highest payout and the worst recent returns of the energy patch. Thats all coming up at the top of the next hour. First, back to tyler. Thank you very much bri. As of today facebook has officially passed General Electric in terms of market capitalization. Facebook, more valuable than ge. So while that may be where we stand today, what is the better investment for the next ten years . Which will be better to own for ten years . Jim iuorio of tjm institution and jeff kilberg join us. Jump ball here. Im going to let the shorter guy take it. Thank you very much. Okay, this is an interesting question, and ive been thinking about it all day. I dont think of it as an either or proposition. I think ge will clearly be relevant and if an earnings settle and settles above 28 i think youre getting a good price because its been knocked town by lower oil prices, by the fact that u. S. Bond rates have gone up making that dividend look less attractive and ge is a good play. The question is which one is better for the next year and the answer to that is facebook. Facebook went through a phase a couple of years ago where it started to dip in popularity and weather that had storm and now statistics are pretty amazing. The time people are using it is up and the number of people using it on a daily basis, the biggest growing sector. If youre going to take the leap of faith and say nothing will replace facebook in ten years then i think facebook is the place to be. Im going to push back and i had the hoodie fully on in the day when it came out in the ipo, alltime highs the longer term play is ge and why is ge very simple ty becoming a more simple and nimble company, doing a lot of divesting which means the opposite of investing. They are did i investing and selling 4,400 and the commercial Real Estate Properties and really focusing on the core price of the industrials so youll see the operating earnings take over 90 when they divest. Im not against ge. When you use the word nimble in a company the size of ge i have a little bit of problem. Huge instruction initiative. Its really appropriate what they are doing and you see its taking a little bit longer. Im for them. Im pro ge again, if it settles above 28 i might get in. Facebook at 97, i want to buy it, but i want to buy it lower. No question, the last couple of days last couple of upgrades that pushed the price high. One thing i dont like is how big a jump it made in numbers. Its been really dead money for a decade. Ty full disclosure we actually own this in the ink capital and the heat seeker uit, and theres been unusual option activity longterm option activity so some think the dead beast will be revised. That doesnt scare me. In many ways it thinks it hasnt had the runup as some of the other names have had. Right. And perhaps all of a sudden people realize. Hasnt gone through the transformation that jeff imthe is putting it through. Theres the gong ladies and gentlemen. Right. That is the gong. That means you guys are toast. Youre done. No. It means we can keep going. Youre done. Thanks, guys. Mandy, thank you as well. Good to see big buddy and little buddy over there. Thanks, guys. Thats it for the first hour. Brian, over to you for the second hour. Thank you all very much. 2 00 on wall street 1 00 in waterloo iowa. Im Brian Sullivan with melissa lee. Welcome, everybody. The dow down 216 points. Oil very fractionally higher but still trading only around 50. 60 a barrel and gold is down again. Five bucks to 1,101 per ounce. Welcome, everybody. More on our Macro Markets in just a moment but right now let us look ahead because it is going to be a big night. In less than two hours a flood of earnings will hit the street. Microsoft, yahoo gopro, chipotle all reporting their numbers as well a the big daddy download of them all, apple. Let us dig in on a few of these names and we have to start with the Biggest Company in the world. Shares of apple trading not too volatilely ahead of the turn. Seeing it to 131. 25. Alex ghana has a buy on apple and andy haargraves has a neutral. Alex, the most important thing you need to hear from apple tonight is what . Brian, i think what we need to see is just ongoing momentum. They are outgrowing the market handley right now. They benefited last quarter from mix up meaning higher asps on their iphones. Strength out of china. If they give us that again, growth in the low to midteens with strong growth margins, thats a real nice setup ahead of the iphone 6 this fall. Andy what are you looking for . Do you agree with that . Y. Were focused on same thing. Have to be folk why you on iphone sales because thats where all the profit will be coming from. I think im probably more conservative than alex on how the Success Network sets up. What number on the iphone would you be happy for, a margin figure, a revenue figure a total handset sold figure andy . That would be the key inside the phone. Were looking for handsets sold of 52 million and margins, the company as a whole of about 40 . Alex, do we care about the watch . Well brian, J P Securities is not all that excited about the apple watch and its first iteration. Its got shortcomings badry life and lacking certain features. The app world isnt fully evolved. Theres some bugs with it so as a first step for apple the apple watch is fine but its really about the road map Going Forward in terms of it evolving health kit, home kit and making the ecosystem all that much stickier. Lets put the absolute number of apple watches and what it does in the near term aside and look tat holistically and in that sense were very comfortable. This company used to be called apple computer. Its now just apple. Do we care about mac books and the imac and computers anymore, or is it literally only the phone . Yeah, pretty much only the phone. I mean, we care about those things, i guess. We care about everything that they do because thats our job, but the phone dominates profits and without the phone the other stuff doesnt matter. You have to get the phone right to get the stock right. Youve got a neutral in the stock, andy. What do you need to hear tonight to say, you know what i . Want to slap a buy on that thing. Well, you know i dont know if there is anything we could hear tonight. Were focused on what happens in the next cycle. Im big believer in the stickiness of the operating system and not negative on it by any stretch but were certainly concerned that you had an upsized cycle and well see negatives in the next cycle and i dont think well hear anything tonight that will change our view. Youre so tied into itunes and all the apps that you could never change if you wanted to. Thank you very much. Let you get back to your day jobs. Thank you. Thank you, brian. Yahoo shares are slightly higher ahead of the earnings after the bell. Guys, great to have you with us. Jean, i want to start with you because youve got a buy rating on the stock. A door core business thats deteriorating. Bulk of its worth is its assets which is also declining in value and im talking about alibaba and the spinoff may not be tax sufficient. Why a buy right now . Because we think ultimately if the spinoff doesnt happen the stock is worth 38 which is where its at and theres a greater probability that its more efficient than what investors think so thats why we have a buy on it. Were in the camp that the fundamentals of core yahoo really dont matter. They are not good and it really doesnt matter. Its all about the tax implication. So really once the spinoff is done, gene, is there a reason to own yahoo . This seems like a very sort of shortterm trade then. Yeah its a shortterm trade. Ultimately we does think it goes higher and thats where the confident comes from but ultimately they do need to fix the business. If they can improve some of these really negative metrics, for example, the display business down 5 or 7 last quarter and down 5 in the june quarter but the perception is based around the tax treatment of alibaba. What are some. Things youll be looking for on the Conference Call . You pointed out in the downgrade note that even though the noncore businesses were showing strength in the First Quarter, it is the core business that intrigues you the core businesses are under pressure from strong competition from google on the search side and facebook on the social side and google dominates mobile search which is the big growth area of search. Gene, in terms of the tax treatment, we may not get clarity on this for quite some time. Its really up to the irs. Do you expect that they will comment on that during the call. Is that something youll ask about because it sounds like that is the one reason why you have that buy rating on yahoo thats the biggest reason. And were hoping that they get some color on it. Its going to be hard to say whether they get that. Most likely this is all happening in realtime and were probably a few months away from getting clarity on it, but, again, we think that its going to move in investors favor in this case and were probably not going to get a ton on that tonight, unfortunately. Ivan, anything that will make you reconsider your neutral rating on this stock . The key is going to be growth in some of the other areas. Do have key value areas in Yahoo Finance and Yahoo Fantasy Sports teams so they have some good components but the overall core business i think is going to be tough to turn around and tough to grow unless they show some signs of greater User Engagement in search and in mobile in some way, but they are really losing ground in mobile and now they have competitor in verizon with verizons purchase of aol who used to be somewhat of a partner so i think its difficult for yahoo s core business to show strong acceleration. Guys thanks so much for your insight. Appreciate it. And i think youre going to stick around and let us switch gears to microsoft. Ivan often covers microsoft. Well give him double duty. He has a neutral rating and lets also welcome in Brendan Barnacle with an overweight rating on microsoft and well start with something called dull by important. Microsoft changing the way it reports earnings going from gap to proforma what. Will this change when we hear the numbers today . Its really going to impact our guidance Going Forward, and particularly as we look at windows 10 mig ray the accounting changes will be different there which would have required us to dramatically reduce the revenue that was recognized in the current period which would have resulted in a big decrease in earnings. We wont see that the same way as weve seen it historically. What weve historically seen is the gach numbers and reconcile it and give it to the same place and the cash flow doesnt mean at all but it means earnings will maybe start to show some growth from these levels which we havent seen in the last three years, mostly because of nokia so its going to be an important change and one that most Software Companies do so its consistent with what their peers do. Ask the same question and ask the guys about apple. Whats the most single important thing that youre watching tonight when the numbers come out, brendan . Absolutely watching how this collective Cloud Business is doing which is mostly off the 365 and azure. The future of microsoft. It will be recurring revenue and critically important revenue and as we make this move to the cloud its more than just an accounting change or are you getting more fundamental users or new use cases . Seen that with other Companies Like adobe and starting to see it with microsoft. Thats the critical thing to watch. Before i get ivan in dig in more on that number. Are we concerned about licenses, revenues, profits . What numbers inside of the revenue, the trading pivot . What we really want to watch there are the growth numbers. Weve seen explosive growth out of that and want to continue to see that momentum so looking for numbers that are well up almost to the 100 level which is some of what weve seen. Thats what we want to be watching there. Relatively small numbers because were early in this transition and it really shows they are having success in that part of the business. Ivan, your number one thing to watch tonight on microsoft . Really three key issues one, the significant cost and the writedown of nokia. Second the core pc business is in declear as more and more people access the internet and content and data through phones and tablets, and the other nearterm problem but longterm benefit is they are going to move from a one point in time recognition of revenue to the annual licensing model which overtime will be good but in the near term is the reason for this adjustment and the difference of going from gap to the proforma reporting basis. Very unoriginal with my questions. Ill give you, ivan the same question that i asked andy. What would it take to change your neutral rating on microsoft to a buy . What have you got to here. Strong growth in the azure, the Cloud Business because they are adding customers n. Cloud they do have a lot of competition, one being from amazon and second being from google. All right. All about the device with apple. All about the cloud with microsoft. Brendan, ivan, guys thank you both very much. Appreciate it. Thank you. Up next tesla shares hitting the skids a bit following a big downgrade. Well tell you who cut it to a sell. Plus, our exconclusive look at Oil Companies with the highest dividend payouts but some of the worst Stock Performance, and as we head to break lets get a look at commodities on this down day for equities. Seeing crude oil up just a bit. Copper and sugar are down. Well be back right after this. Ams into your brand new car. One second it wasnt there and the next second. Boom youve had your first accident. Now you have to make your first claim. So you talk to your Insurance Company and. Boom youre blindsided for a second time. They wont give you enough money to replace your brand new car. Dont those people know youre already shaken up . 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The headline here is that the ftc, ftc commissioner chairwoman Edith Ramirez tweeted out the ftc will take action for allegedly violating a 2010 order in which the ftc made life lock pay a 12 million fine as well as it demand it had take better care of Customer Data and this alleged that life lock used false claims to promote its services and settled the claimsed with the ftc by paying a fine and now the ftc is saying they didnt live up to the conditions of that particular settlement so, again, those shares down by 26 . Well kind of wring you up to speed what happens when it reopens. Halted and down 26 because of these ftc headlines that say, chairwoman Edith Ramirez saying that they have violated or allegedly violated their 2010 setment with the ftc. Guys, back over to you. Dom chu, let me get this straight. Down 26 on the back of a tweet from the ftc . A tweet from the ftc chairwoman. Thats the reason why youre seeing it down. Should be interesting to see how it reopens again. This company did pay a 12 million fine. Where was the tweet . The tweet was just about well, seven minutes ago. Why is somebody for the government tweeting Material Information during a market open . This i can not answer. Melissa, do you agree with that . I would in theory agree though i believe the s. E. C. Ruled that twitter was the Public Disclosure of information. Shareholder, youre driving. If a ceo, for instance chooses to tweet Something Like we have all these subscribers, et cetera, et cetera and the stock moves, thats legit. Dom,ion. It could be. Again, this is reg fc fair disclosure, why carl icahn tweets this stuff and elon musk tweets a lot of the stuff. Im not sure about the argument on that front but its interesting that it comes via this kind of format that its new age, if you will. I agree, i agree, i agree. Melissa, youre exactly right about the public forum. Im not criticizing just the government. I would say in any situation, what is it not that many people are on twitter anymore, so thats going to be your source of disclosure . It may not be the only one. I mean this is just because they flagged it right away. Im sure if we went to the ftc website or somewhere else somewhere else theres release. This is an interesting stock because back in 2014 early 2014, in fact this was a 22 stock so its roughly twice where it is trading now. Again as dom had mentioned, this is a stock has halted because of volatility reasons and the stock moves very quickly in a very short amount of time. Down 26 , its halted, and as as soon as that stock reopens well bring that you trade. Lifelock, ftc tweets sending it down 26 . Lets get you caught up on some stock headlines on our radar. Travelers reporting a profit with shares beating estimates. Travelers bottom line was helped by a drop in catastrophe losses. Sha shake shack up and nike ceo parker staying on job for another five years. Trading just downed. And ubs is coming out saying sell the stock and downgrading it on the battery side of the business. Lets get more from phil lebeau on the tesla stock. Not a complete surprise when you see what they say inside this note in terms of looking further out into the future. Shares of tesla, a heck of a run over the last six months. Really they have moved substantially higher up about 40 , but it has been knocked back today. Heres the downgrade from ubs. Essentially cutting it down to a sell rating from where it was. The price target dropping from 220 down to 210 and the 2015 earnings per share estimate they have cut it by 80 , but the real focus is looking further out over the next ten years in terms of whether or not tesla can achieve some of the targets that have been set out there. One of them can be it sell 1. 5 million vehicles by 2025. On that ubs has logistics to sell over 1. 5 million vehicleen years is very challenging adding two more Assembly Plants and two more gigafactories and total costs would likely be 6 billion to 9 billion. Lets go more near term. For the remainder of this year tesla shares primarily with the model s, the goal is 55,000 vehicles. That has not changed and keep in mind most of those sales will be coming in the second half of this year particularly in the Fourth Quarter, as they ramp up deliveries and sales of the model x, suv, which are expected to begin late third quarter, early Fourth Quarter and were showing you tesla shares going all the way back to september 3rd of last year. You are saying not a huge runup in n change. The reason were going back to september 3rd, thats when tesla signed the deal with nevada to build the gigafactory and thats when people said are we building an auto company . Lifelock has resumed trading and lets go to dom chu for the latest. Dom . Shares that are down 38 , 4. 2 million shares have traded so if a. Just to put that in perspective. On an average day over the past three months a little over a million shares traded so four times its average daily volume. Again, we told you before that the stock is down about 37 , 38 right now. It was down about 25 before this trading halt kind of lifted and it reopened for trading again. Again, this is a very sharp move to the downside. Dom you know how sharp this is. Its halted once again. Guys, im looking at the release and just asked our d. C. Team to verify with us what time the release went out, not the tweet, but the release. One would assume it would be the same time but assumptions are dangerous because it makes a you know what out of you and me as my dad said. Youre putting out Material Information on a company. If a corporation did this they would be in big, big trouble. If the ftc is putting stuff out in the middle of the trading day, i dont know. For whatever reason stinks. Also looks like the tweet was referencing a press release. Forget the tweet. Im saying there was a press release that was issued. Thats what im looking at. Brian, is this release supposed to be released . I mean what are we waiting for . Any time before 9 30 or after 4 00 p. M. Like all corporations do. They reveal all their Public Information when the market is closed so that everybody has the same access to the information, regulation fd passed a decade ago. Says it has to be disseminated to everybody at the same time. Everybody has to see it at the same time. Again, i im not im it has the ability to see it at the same time. Nobody brian, to your point here not everybody has access to pr news wire as well. Exactly. At any given time but thats considered public dissemination of data. Its a tough debate to have but what youre trying to say is regulators should be held to the same standard as companies when it comes to reporting. I dont know why were even debating this, guys. If youre a lifelock shareholder and youre down 40 right now and youre thinking well you just got out of a meeting at your office, and someone says hey, dude, sorry about lifelock. Let me ask you this. Would it be any better if the ftc released this press release after hours and the stocks in the after hours session falls 37 and you wake up the next morning and its still up 37 . Arent you in the same boat same exact position you are right now. You cant make this argument. You cant argue companies have to release Material Information when the market is closed. Why shouldnt regulateors be held to that same standard . I agree you cant trade on it but at least you have time to disseminate. Thats my only point. I dont know, nobody agrees with me . Okay. All right. The two sides of the story. Like you said what youre seeing right there is a shot of the New York Stock Exchange floor where people are kind of checking out whats happening with lifelock shares because they are held at 10 figure 10 exactly was the last trade we saw, down melissa, you and i have been doing, worked together a long long time right, a lot of people dont realize we had a different life before this one here. Companies, Trading Halted for news. Lets continue this debate brian. How about the companies that have press conferences during the day when they release product launches. Thats often a stockmoving event that happens during the trading day. When tesla had its event recently. That was during the trading day. Both those events moved the stocks. Are you saying those things should also be held in the after hours session . Isnt is that the same thing . Because you dont know its going to move the stock. If the ftc comes out and says were slamming this company and going to crush this company with our findings about its core business, maybe im debating with myself. Off for three days i was relaxed and now im all worked up again. Theres a point that you have. When you make a Statement Like this, i mean is it a statement . Right, via regulatory unit of the government saying that if you if you act badly this is the kind of stuff that can happen. Im not saying that exactly speaks to the time here. I need to get my Securities Law professor from law school roberta carmel who would probably know more about this than i would. I was at law school 12 years ago. I cant remember a thing. I think youre debating an ethical point. Ethically it should not happen. Legally i dont think theres anything to prevent it from happening obviously. Theres a difference between ethics and whats legal though. Melissa and brian, theres a point, if you do this during regular trading hours arguably arguably, there is more liquidity for some than it does trading in the preor post markets. People still on twitter, a couple people i agree. Sully appears to be making up disclosure rules. Im not making up a rule. Im just saying it kind of stinks. I guess im just wondering if if the government is going to put out this kind of information thats going to wipe basically half the market cap off a publicly traded corporation shouldnt they alert the nyc or nasdaq halt the stock. What do our viewers think . We should ask them and they they can tweet us. Absolutely. Do it. Wed love to hear from you guys. Save the nasty ones for the domino and the nice ones to me. And me. Ill take the nasty ones why not. I think im arguing with myself. Maybe we can get somebody on the phone i feel like ive been arguing, too, brian. I was in wisconsin with beer and brats and now im all worked up. One analyst upping his price target on a biotech stock by get this, 225 . That name and four other big stock calls. That just ahead and were hovering right around the key 50 a barrel market. Theres my twitter handle, below 50. Were going to find out. Stick around. [ male announcer ] eligible for medicare . Thats a good thing, but it doesnt cover everything. Only about 80 of your part b medical expenses. The rest is up to you. So consider an aarp Medicare Supplement insurance plan, insured by unitedhealthcare Insurance Company. Like all standardized Medicare Supplement insurance plans they could save you in outofpocket medical costs. Call today to request a free decision guide. With these types of plans, youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. Join the millions who have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp. And provided by unitedhealthcare Insurance Company, which has over 30 years of experience behind it. With all the good years ahead, look for the experience and commitment to go the distance with you. Call now to request your free decision guide. O0 at ally bank no branches equals great rates. Its a fact. Kind of like mute buttons equal danger. That sound good . Not being on this phone call sounds good. Its not muted. Was that you jason . It was geoffrey it was jason. It couldve been brenda. All right. As the animation says time for our daily street talk section. Here we go. United natural foods, this is a downgrade. Albertsons terminating the contract for the Company Accounting for 5 of united natural sales. Guggenheim, while cutting their price target does keep a buy rating. Melissa says they see a shift during fresh initiatives. Disaster du jour underperformer for its peers like a haynes celestial or whole foods. Down, ouch. Sun edison giving back almost all of the acquisitions made yesterday. Downgrading the stock to a neutral and maintaining its 35 price target. They think the integration of assets and Capital Market and valuation could overhang the stock at this point. Will it set off a wave of consolidation in solar . Everyone says prices have to come up. Theres too much capacity out there. And oil has been a pressure even though theres no connection to the price of oil. It has been a pressure . And gas, too. Definitely. Third stock, estee lauder coverage starting with a buy and a 107 target a 20 upside from here. They call it a core holding because of likely 6 organic growth the next three years and the analysts there, melissa, here name is april c. Potential for m a. Would i assume it would be the buyer because they are so big. You never know. This stock, most of the gains made this year alone. This year its up 1 . Almost the same as 12 months. Amgen, a bullish note out of cowan recently raising prices on a number of their drugs. Analysts saying it underestimates the prices and stock is flat though on a call. The stock is up 36 over the past year. Yeah. Its market cap is now 124 billion . That makes it bigger than Bristol Meyers and eli lilly. I think we need to change our definition in the media what big pharma is. Big biotech. Crisp stock, and anna core 6. 5 million market cap, working on an antifungal product. Goldman sachs upgrading it to a buy from neutral. The target. I know youre going to flip out on this one. Target was bumped to 195 from 60. Way behind. Are you flinching from me because you think im going to strike you . General flagellation. The stock is at 151, so take this call with a grain of salt. The analysts missed. Much of the upside. I debated internally and put this in the under radar. A good one though. If an analyst leaked and issued a mea culpa. Is that what the analyst said . Rarely you get that and you get analyst speak because 100 lawyers have to go through everything you release. Yeah. Anacorp their putics. That run, that little run there was before todays positive note. Because i had two positive phase three trial results for its topical ointment for atopic dermatitis, antifungal treatment. 7882 over a year. One month, 107 . Oil hovering around threemonth low. As we head into the close, a settle price coming up when power lunch returns. Im Courtney Reagan and here is your cnbc news update at this hour. The Senate Finance committee has passed a bill to renew dozens of temporary tax breaks that expired at the start of the year through 2016. The corporations and Small Businesses would be the primary beneficiaries. The bill would add 95 billion to the budget deficit over the next decade. Well, members of the army thanking the citizens of chattanooga and city leaders for their support during the recent shootings that killed five servicemen. Its the first time the inside of the Recruitment Center has been seen since Mohammad Youssuf abdulazeez went on a shooting spree last thursday. Irans foreign minister formally submitted the nuclear deal to Irans Parliament which convened to review the deal. Hardliners could vote against it. Their numbers arent enough to derail the agreement. And Warren Buffett says foreign media reports that he and an italian Real Estate Agency purchased the island of st. Thomas the one southwest of athens, are a total fabrication and as stated in an email buffet said hes never even heard of the agent who is making the claim. Gosh, i would love to buy an island if i could. If i were him, i would. Thats your cnbc news update. Courtney thank you very much. Back to dominic chu with more on lifelock and apparently this stock drama is now playing out in realtime because i guess lifelock is coming back at the ftc. Absolutely with a prepared statement, brian. Lifelock shares we should note as you see on the screen, shares halted. The last trade was 10 per share, back around 2 18 this afternoon. Lifelock has a statement saying after more than 18 months of cooperation and dialogue with the ftc it became clear to us we could not come to a satisfactory resolution of their issues outside of a court of law. We disagree with the substance of the ftcs contentions and are prepared to take our case to court and also say based on evidence we do not believe that anything the ftc is alleging resulting in any members data being taken. As required by the consent order, lifelock hired independent professionals to assess the information security. They also say every audit completed by those third parties affirmed that we were in compliance. Im just, of course, reading snippets of this. I will be tweeting out the full statement and lifelock out with a fairly strong statement saying they dont believe they are in the wrong and they are prepared at least to take this case to court if they need to. The shares are still halted as you can see there, but lifelock now affirming that its put out a statement on this saying they disagree harshly and very sternly with what the fec is alleging. We had a pretty good debate about whether or not the ftc should disclose anything about twitter. The release put on the website before the tweet and then it was also released via pr news wire so there was, prion, according to your definition a more public dissemination of the information beyond twitter. And i just want to be clear. Sometimes i get worked up and maybe my points dont get maybe as much as i should you know just being a reader. Here eat thing, melissa. Not just saying that its twitter or whatever. Its during market hours. I mean Edith Ramirez, the ftc chair, she tweeted this out at 2 00. She has 2,340 followers. Im not knocking her follower count. Thats not a big during the market. Thats neither the number of followers is neither here nor there if your argument is solely the disclosure during market hours because they released it to the ftc website which is available to anybody with an internet connection. It did go out 2 00 p. M. And doesnt speak to your point the idea its being done by hours. No argument we can make on that front. I guess, guys. Let me let me just and ive never said this about myself before. Let me take it down a notch because i normally dont do that. Why not just wait . Same situation. Wed be down 38 in the afterhours session. Theres no harm in waiting. There is potential harm in not waiting, no . Potential harm in not waiting. By putting it out. Who are we harming, the exact same people, lifelock Share Holders . The Short Interest on the stock 14. 5 . Its funny because some of the twitter comments implied i was being old school or a dinosaur about this. I think its the exact opposite. With algos and High Frequency traders able to read, they are scrubbing the internet in nan seconds, any release during market hours will automatically benefit the High Frequency traders because even if youre a speed reader, the micromachine man, you cant do this. If youre contention is about an average average investors will sell faster or at a better price if they waited until the after hours. No. Whats the point . Under your thesis then why not just release all information in market hours . Remember the way it used to be. Why not go back to that . They do a lot of releases during market hours. Many times, dom, you do market flashes on stocks that are moving during the session. Ipos come out all the time that say our sales have fallen 20 . They dont do it. To speak to brians point normally when we come with the market flashes, when its halted for news pending its because the company requested that the stock be halted to give investors time to figure out whats going on. In this case here the argument is whether or not government regulators or any other party is held to that same standard as companies. I want to hear were getting yelled at in our heart. Way to the hear what the fast money traders have to say. Ill ask them. Time for trading nation because traders trade Better Together and today well do something a little different. This morning oil and gas Company Chesapeake energy killed its dividend. Citing a weak pricing environment and other oil and gas companies, will they cut their dividend . Who knows but we can know who has a high dividend yield and a Stock Performance and i want to be clear. Nobody is suggesting any of these companies will cut their dividend. They could raise them for all we know but we look for companies with high payouts and just to do a hasnt list for you. Lynn energy, remember folks, dividend yields is a dividend in the price, so as the price goes down and the dividend stays the same the yield is going to go up. Lynn energy 20 dividend yield down 52 over three months. Denbury resources and tidewater, stock down and some of the biggies bp and Conoco Phillips just to be clear, no one is saying these will get cut. These are just the highest dividend yields of the nonmaster limited Partnership Companies out there. Weve got andrew keen who specialized in options. And andrew based on the options market, is anybody saying oh, we could get a negative headline on some of these companies at some point. Yeah. Looking into the oil spies the ones that have dividends higher per share which has chevron and in the near term we dont see any dividend cuts in those names. If i looked at bp and used the option market, a lot of options can be traded for a dividend cut. Weve seen this a lot and saw it in chesapeake. Weve seen puts being brought across the board in lynn energy so im not sure if the dividend will get cut or they want more on the down side. The higher it goes down the yield is 20 . Nothing in the short term in the three names. Bp i looked out to 2016. Its implying about a 10 to 20 dividend cut in that name. Even though it has a very solid balance sheet. Interesting on the options side of it andrew. Thank you. Ari, the charts are supposed to factor in all known and predicted information. What are the charts telling you . The charts would suggest to stay away from all of these names, you know. We maintain our underweight rating on the Energy Sector because we think the secular decline in Commodity Prices are going to continue to pressure the stocks and, you know well talk about bp the one that the option markets are pricing in for a possible decline. What you have to watch here is 36. 50. If you close below there, that would equate to a 0year breakdown in the stocks trend. I wouldnt want to be long if that development happens. Overall bear trends across the sector. Were sellers. All right. Sellers, and ari going wide saying ignore the whole group. Ari, thank you very much. Appreciate it. An drurks interesting stuff from inside the options market. Do appreciate it. For more trading nation head to our website tradingnation. Cnbc. Com. Coming up superstate Real Estate Broker dolly lenz is joining us to see whats breaking up the real estate market. [music] defiance is in our bones. New citracal pearls. Delicious berries and cream. Soft, chewable, calcium plus vitamin d. Only from citracal. You focus on making great burgers, or building the best houses in town. Or becoming the next highlyunlikely dotcom superstar. And us, well be right there with you helping with the questions you need answered to get your brand new business started. Were legalzoom and weve already partnered with over a million new Business Owners to do just that. Check us out today to see how you can become one of them. Legalzoom. Legal help is here. It took Serena Williams years to master the two handed backhand. But only one shot to master the chase mobile app. Technology designed for you. So you can easily master the way you bank. Y with a news alert on whats happening with greece because it appears s p, the ratings, Credit Ratings agency has again removed or at least boosted up the Credit Rating of the company to a cc plus rating from a prior ccc minus rating and has improved the outrook to stable from a prior negative, so again, some movements on the greece front. We havent heard about them for at least a couple of days. Interesting moves there. Well see how that reacts or the greek market reacts to that. More on power lunch coming up after the break so keep it right here. Nk no branches equals great rates. Its a fact. Kind of like shopping hungry equals overshopping. By the time Police Arrive on a crime scene they could have little to go on. A vague description. A single piece of evidence. A partial plate number. With an app from ibm officers can now access over a billion police documents to find hidden connections and identify potential suspects. Ibm analytics helps one hundred thousand officers work smarter every day. At ally bank no branches equals great rates. Its a fact. Kind of like mute buttons equal danger. That sound good . Not being on this phone call sounds good. Its not muted. Was that you jason . It was geoffrey it was jason. It couldve been brenda. Life block just reopened for trade. It was halted a couple of times. Money continues to flow into American Real estate from around the world. There is any chance the u. S. Will lose its luster any time soon . Is there any chance the u. S. Will lose its luster . Absolutely not. If anything it will gain more momentum. We have much better choices. The new properties being built are ultraluxury. Real new level of luxury. They have wonderful choices to come in and buy something. We are still cheap. Look at monaco and hong kong. We are cheap in comparison. Some might say better. What is going on with the chinese buyer . They pushed the average price higher last year. Yes. With the meltdown in the stock market are you seeing any hesitation in closing deals . Im seeing zero hesitation. If not more activity. I think the chinese buyer in general does not like to be told what to do what they can sell what they can buy. I think they are looking at the u. S. Much more so as a safe haven for real estate. The limitations in the stock market over there in the meltdown are making people come here. Exactly. Theyve already got their money out. They can do what they want. Its not a question of pulling it out. I think people love new york City Real Estate pornography. The prices are so stupid. Stephen cohen, hedge fund manager, big apartment in the 731 lexington where bloomberg is cutting his price from 113 million to 98 million. Practically a fire sale. Its like lifelock. Exactly. 79 million, whatever it is. No outdoor space, for 79 million i cant get a patio . You cant even get a little terrace to have a sip of tea. No. It is a problem. Thats not the biggest problem. Its a great apartment. Its beautiful, ceiling heights, gorgeous art as would expect. A fabulous porn apartment, real estate porn. The problem with it is there is too many competition now. At that price point . Its 877 per square foot now. 220 central park south, brandnew building is average price asks 7,514. 877 per square foot is stevies ask. 8,700 . Thats too high. The average is 7,000. 220 central park south, the average of the filed offering plan is 7,514. Its so much more expensive. You can have brandnew, never occupied which people like versus old and maybe tired. You left him speechless the first time. You know what it is . Im trying to do mathematical kulgss in my head. Lets say somebody in toledo has a 2,000 square foot house, if it traded at a new york price, what it would be 16 million . His price, yes. 16 million for your 2,000 square foot house. Its in toledo so therefore, its not. Great to be here. I love the apartment. Pick it up. Well have a cocktail at your new apartment. United technologies blaming a china slowdown after cutting their forecast. Well tell you who could be affected. Are you moving forward fast enough . Everywhere you look, it strategy is now business strategy. And a partnership with hp can help you accelerate down a path created by people, technology and ideas. To move your company from what it is now. To what it needs to become. Everyone loves the picture i posted of you. At t reminds you it can wait. United technology taking a hit after cutting a forecast blaming china slowdown as a factor behind their weakened outlook. Dom chewu looking at other companies with exposure. We have companies having sales exposure with china. If you look at applied materials, about 18 sales exposure. A lot are technology companies. Also nvidia 21 of its sales come from the china area region that could include hong kong. About 55 . As you talk about some of the Big Companies out there that may cite china as a potential issue given what could happen with an economic slowdown what could happen with a greater perhaps pullback in the overall market there, perhaps some of these companies that have sales exposure to china could be the ones affected. This is a limited list here. A lot of other companies have exposure to that region. Some stand out because they have a good bulk of their sales going to that particular region. Some of the stocks you may want to take a look at. Some to do homework on as you research what your picks are going to be. Check out what is happening with china exposure. Good idea. It doesnt have to be the percentage of revenue either. The stock was down more than 6 in todays session. Weakness in bricks was a primary reason why the stock is down. Brazil russia india, china. Not like adobe stones you build homes with. Correct. Not the kind you lay in the form of a wall. Ibm is interesting and a tough story. 13 straight quarters of declining sales at ibm. Ginny remidy. When ceos lead is that a telltale sign . Today after the bell its a full slate. We will be looking for signs of a china slowdown particularly from apple. Even if apple doesnt see the impact, it will be names like dom said nvidia and broadcom. Just to remind you, apple, microsoft, yahoo, gopro reporting earnings after the bell. Weve got the voice of siri to announce apples earnings at 5 00. Do you want me to call in and debate live talk . No. Done with that. Done. Closing bell starts right now. Welcome to closing bell. Im sara hes nen for kelly evans. Im bill griffeth. Dow down 200 points. United technologies and ibm accounting for more than half of the decline in the dow today. We will debate whether those two stocks could have the way for more earnings drama to hit the Broader Markets. Both of those companies citing concerns in the bricks especially in china. After the bell the earnings drama will be in full force. Get ready. I cannot wait. Apple and microsoft will be releasing their latest numbers, plus got