Transcripts For CNBC Power Lunch 20240622

At the beverage company. A 19year cocacola veteran. Most recently president of the companys european arm. Shares are basically flat today. Year to date they are down a bit by about 2 . Sara eisen is with us live this hour from the new York Stock Exchange. Sara, this isnt only a story about coke today. A big controversy erupting over the Health Impact of the soft drinks. Yes. Scientists at the center of this weeks coke controversy is speaking out. Dr. Jaimes hill at the universiy of colorado says the recent media reports on his work vastly oversimplify a complex issue, he says, of fighting obesity. Coke has faced a firestorm of criticism this week after the New York Times reported monday that coke is secretly funding dr. Hills work which says that obesity is mainly caused by lack of exercise, not diet, not calories like those in sugary drinks. Well, thats not entirely true, says dr. Hill. He says diet is a critical component of weight control as are exercise, stress management, sleep and environmental and other factors. The problem does not have a single cause and cannot be addressed by singling out only one of those factors in the solution. That runs contrary to the report. On the charge that coke is using his group to get the results it needs to fight its own sales slump in soda, he insists that the gebn, his groups research, are independent and not subject to preapproval by the cocacola company. Now coke is still facing falling soda consumption and increased health awareness. It is especially hurting sales of diet coke. Thats something i asked the new number two executive, James Quincey today in an impromptu call announcing his promotion. In europe diet drinks are growing faster. Both are growing but diet is growing faster. I think as science comes to bear in the u. S. I think well see the turnaround of the category and a great brand like that, coke. That will just allow us to further extend what were already achieving in the u. S. K where weve got revenue growing in a healthy manner already in the u. S. So i think the recovery of diet coke will only add to that. While the ceo said it would be inappropriate to speculate on whether quincey is indeed his successor, that remains to be seen. Declining diet sales and the rise of obesity crisis and concerns are certainly something hell have to face. A lot of people are starting to wonder whether stocks in the dow put in some bottom when we were down 250plus points, then rallied. Right now, take us forward, bob. Unfortunately, early on the evidence was that this was just a very brief blip yesterday that tremendous rally. However, things are improving in the middle of the day. Id say the jurys still out right now. Look at the s p 500. It started with a real disappointment. We just had oil crummy. Energy wasnt doing anything. There wasnt a lot of leadership early on. Volume was a little bit heavier than normal. As we picked up throughout it the middle of the day, volumes lightened up a little bit but were in green now. In terms of the market now, volume is on the moderate side but it was heavier early on. Advanced decline line about even, Consumer Discretionary are leading. Pretty big name for lowes. Theres no followthrough in energy at all. People again yesterday twice normal volume in the big energy names trying to some kind of bottom. But o oil stocks this morning, all did well yesterday but didnt go anywhere. Department stores, kohls big disappoint there. Down almost 9 . Dillards doing pretty well. News alert in the bond market. 30year bonds up for auction. Rick santelli tracking action at the cme. Tyler, another grade where it is more defined by the tail. Dog, think dog. Dplus is the demand grade. I could have gone maybe a cdouble minus. Just like the 10year yesterday was soft. 16 billion. 30year bonds, the rate at the dutch auction 2. 88. But the high yield on the one issued market was around 286. We tailed pretty large all the rest of the dynamics are close to average. 2. 26 bid to would ever. A little lighter than 10 option 2. 34 average. The only thing about this that was kind of solid, slightly above 10 option average and it continues to be the one metric consistent in most auctions for foreign Central Banks seem to be playing directly on the light side. Dplus, 64 billion in supply hit the market. You can see yields moving up on the auction results. To kate rogers with a quick market flash. Watching yahoo shares surging by 5. 5 on an upgrade from bernstein, the firm raised the stock to outperform from market perform saying the current share place already reflects the worst case scenario. Shares are down 27 this year. Currencies are calmer today after China Central bank weakened its currency for a third day in a row. This time they held a rare press conference, saying it would be a minor devaluation. Claims about 10 were wrong and that it is aiming for more of a market based rate. Dollar is more than 4 stronger against the chinese currency in three days alone. But were not seeing the kind of turmoil that we saw for it the past few days. Dollar is stronger against the euro and yen as retail sales in the u. S. Showed a rebound fueling bets that the fed may actually be on track to raise rates as long as the Global Market mood stays calm. For more on the big we tail sales report of the day showing 0. 6 growth, Michelle Myer from bank of america. Take us beneath the headline. Department sales were not great. The headline number was robust, 6. 6 . Auto boosts that total. If you look at a core control number, take out autos, building and gasoline stations, sales were running at 1. 3 . If you dig deeper at some of the secto sectors, Department Store sales continue to be quite weak falling on a year over year basis. This is not a new development. This has been something thats happening for the past few years. I think it speaks to the substitution nature in terms of how were spending. A move from brick and Mortar Stores to more internet sales. Thats certainly reflected in todays report. Home improvement sales which are doing well, those stocks. The predicament for fed, they see a report like this and the u. S. Economy, the rebound is on track. They see something that happened yesterday when the dow was down nearly 300 points and the chinese currency revaluation and it gives investors pause. How do they put it all together and when do they move . Clearly the events of the past few days have made it a little more challenging for forecasting the fed or even for fed officials themselves because it adds another element of uncertainty and risk in terms of the Financial Markets and in terms of the move in the dollar and global trade. But if you take a step back and think about the what the fed has been telling us, they are looking at the cumulative progress that the economy has made. The total amount of jobs that weve created. It is the rate of unemployment which is down to 5. 3 close to their target. Based off of those metrics, it seems like the economy has indeed made progress and we think that theyre gearing up to go in september. Septembers on. Well leave it there. The two questions of the day. Michelle meyer, u. S. Deputy economist at mabank of America Merrill lynch. Coming up, our bull and bear will duke it on on kohls. Were going back to business school. Our weeklong series with the deans from some of the top schools in the country continues. You are watching cnbc, first in business worldwide. No students ever been the king of the campus on day one. But youre armed with a roomy new jansport backpack, a powerful new dell 2in1 laptop, and durable new stellar notebooks, so youre walking the halls with varsity level swagger. Thats what we call that new gear feeling. You left this on the bus. Get it at the place with the experts to get you the right gear. Office depot officemax. Gear up for school. Gear up for great. Welcome back to power lunch. Were watching shares of monster beverage, theyre up over 5 on an upgrade from Morgan Stanley. The firm raised the stock to overweight from equal weight on anticipation of the idea that conditions leading to recent erpgs weakness are temporary. Shares are up 38 this year. Over to sue herera now for a news alert. Thank you very much. Nbc entertainment announcing that they are extending tonight show host Jimmy Fallons current contract through 2021. He will continue to guide late nights number one program into the next decade. According to nbc entertainment. Fallon took over at host in february of 2014. Since then, nbc says the tonight show starring jimmy fallon has dominated the late night landscape winning in all key ratings categories. Cnbc is a unit of nbc. Sara, back to you. Other names were watching at this hour, mylan labs wont give us on its hostile takeover attempt of perrigo. Now it says it wants 50 . Perrigo shares are getting a boost today on the news. Advance auto parts shares also rallying. The company reporting better than expected earnings. Thats helping the other auto parts retailers as well. Auto zone, oreilly both hitting 52week highs. Valeros at its highest level in more than eight years. Up more than 40 this year. Shares of kohls dipping more than 9 today after the retailer missed on estimates and posted a sharp decline in profits. You see down almost 10 at this hour. Shares of the company down more than 13 over just the past month. Jan roger niffen is bearish on the stock, and nealy favors it. Jan, make the negative case first on kohls and why you think they cant turn it around. Well, in the short term, kohls is doing some good stuff. They were under managed for six or seven years. They seemed like they were kind of sleepy. About a yearandahalf ago they startrd doing a Loyalty Program that i think is a good one. They went heavier into branded product which will work well for them. In the short term i like what theyre doing. Longer term i think they are in a tough spot. They sort of occupy the same place at jcpenney. 2,200 stores with the two of them. With the switch to the internet maybe thee need 1,000 stores between the two of them. Maybe less. It is a tough transition for them. Macys is doing a great job with omni channel retailing. So is nordstroms but they run much higher price points. Nordstroms 42, 44. Macys more like 26. Kohls is where penneys and tj maxx is. To jans points or make separate ones of your own. Heres the deal. We really like kohls and its really tough to say that on a day what you are recommending a stock when it is down 10 . Why we like it, the stock is cheap, they have pea got yield and theyre a Better Company today than theyve been over the last three years. We think that the issue is traffic and traffic is going to normalize even over the next couple weeks. This low level we think is going to be of a vision past and the stock is going to be higher just in the next 30 to 60 days. How about as a longterm matter . Longterm, retrail itself has had a very difficult structure. Everything that jan has just said we completely agree with in terms of the overall omni channel is necessary. People have been having to make investments along the way but we like the way that kohls is actually answering that. Theyve been rolling out pickup in store and improving the profitability of their ecommerce channel. We think these are positive moves to make sure theyre competitively positioned for the long term. I actually agree with everything neely just said. They are down 10 but they will have a better fall than other retailers relatively speaking because of the things they are doing right. So in the short term i think she is exactly right. When i look a little longer though than the back half of this year, i think it is a very tough space that theyre playing in and i think it will get ever tougher. I think it is really hard to win the game at omni channel and also think for them, it is hard to win the game in branded product. Macys and tjx own branded product. Theyre fighting the battle to get more branded. Thats going to be hard. I think it is going to be hard for them to win an omni channel. Longer term im negative. But i think neelys right, over the next 30, 60 days they look pretty attractive. Thank you both very much. Appreciate it. The question Everyone Wants to know what does the most despised is or beloved woman on the internet have to say for herself . Well hear from the woman who drew this sketch of tom brady. Plus a stunning betrayal of trust. Whole art world was shocked. How an assistant stole millions from one of the titans of modern art. Thats all coming up right here on power lunch. T youre armedy new jansport backpack, a powerful new dell 2in1 laptop, and durable new stellar notebooks, so youre walking the halls with varsity level swagger. Thats what we call that new gear feeling. You left this on the bus. Get it at the place with the experts to get you the right gear. Office depot officemax. Gear up for school. Gear up for great. Welcome back to power lunch. Heres a United Continental nearing session highs up around 1. 5 as it announced it will boost Inflight Entertainment with more content on more aircraft. The expansion includes more hbo content as well as vivo videos an concerts. Jasper john said to be one of the greatest Living Artists of our time, his works selling for tens of millions of dollars. His trusted assistant now behind bars after admitting he stole dozens of works from the painters studio. Heres andrea day with the crime and punishment. Reporter one of his jobs was to file away or destroy the artwork thatas ter johns didnt like but instead he secretly sold them for millions. Take a look. He is one of the greats of our time. So influential, he was awarded the president ial medal of freedom. His iconic flag fetching nearly 29 million at auction. According to court documents, when collectors were offered paintings like these and told they were authentic and authorized jasper johns, they had no idea what they were really getting into. They were meant for a burn pile. Reporter investigators say all stolen by this guy. Jasper johns trusts his longtime assistant of nearly 25 years. This fbi special agent they were stolen. How many pieces in total did he swipe . 22 pieces went to market but there were more than that that were taken. Reporter an artist himself, myer was living in the shadow of a master for most of his life. Thats when investigators say he hatched a plan to make millions secretly selling unfinished works of art, works that johns had told him to file away or toss out in the garbage. He found a gallery that he could work with to sell his works. Reporter but she says he had to make certain that the 85yearold artist would never find out. They were gifts. We have to keep it secret. You cant tell anybody and it cant get back to him or ill get fired. Reporter according to court documents, he sold the works through dorfman projects in new york city. Prosecutors say creating a fake inventory number for each piece making them appear finished. He also signed notarized certificates that the works were authentic and that he was the legal owner. There was nobody in the office to keep track of those works except for him. And jasper johns. Reporter attorney Judd Grossman says his client shelled out hundreds of thousands for this one. These were real quality pieces that were being sold at prices that reflected that through that reputable gallery. Nobody had a reason to suspect anything was wrong. Reporter the son of late real estate titan henry sagerstrom bought at east eight stolen jasper johns, the price tag more than 7 million. Theyre big collectors because theyre expensive paintings. Reporter she says the the two split the proceeds, johns assistant bringing in millions on the side. Four cars, a sailboat. Reporter the scheme run from the artists connecticut studio. Investigators say despite close calls, myer didnt stop. Check out this email we found in court documents. Myer writes in part very bad as i was supposed to destroy, referring to artwork someone contacted the studio directly to verify. These works were unfinished. Reporter according to investigators, he was able to keep the sales quiet for nearly five years until one of the artists friends happen to notice some works for sale in a gallery. It just seemed oed to that particular friend of jasper johns that these works were there. Reporter it didnt take long before myer was indicted and in the end pleaded guilty to stealing from jasper johns. The whole art world was shocked. Not only about who the fraudster was in this case but hot victims were. Obviously jasper johns himself. Reporter myer is now serving his 18month sentence behind bars, ordered to pay 13. 5 million in restitution. Dorfman was never indicted of any wrongdoing but did settle a lawsuit with the victim, terms undisclosed. Weve made numerous unsuccessful attempts to get comment from them. Back to you. Andrea day reporting. The sketch artist, talking about art, who drew this unflattering, some might said deflating version of tom brady is apologizing, sort of. Heres what Jane Rosenberg said about her new controversial drawing. Im under such pressure, i tend to just grab on to certain lines and i dont flatter people. So i have to apologize to tom brady and all his fans if i didnt make him look pretty enough. The internet has gone wild with her sketches. Some comparing her version of brady to the hunchback of notre dame or the scream. I dont know how you paint an unflattering picture of tom brady. She needs to apologize. It was sort of a halfapology. Gold prices are closing right now. Gold was on a tear. It actually was up for five days in a row breaking that streak today. It is closing out with little less than 1 decline. 1,115. It was up five days in a row on the whole china devaluation currency surprise. That gave it a little boost, though its gone back to its weakening ways. Copper has steadied as some calm has come over china. Palladium, platinum and silver all declining with gold. We are seeing a stronger dollar. Back to the bond market. Rick santelli is tracking action at the cme. Hi, tyler. 64 billion in supply has passed through the treasury this week. 10s and 30s werent pretty auctions. An intraday and twoday 30s, not only did we spike after the auction which makes sense in august supply but we are trading well above yesterdays highs. We held that 2nt 72 on an intraday yesterday. It is all about 2. 75 where they settled out the year. Many traders didnt jump in. Certainly seize the bump in the buying has for a moment been like china, calmed down a bit. Market stabilizing today but look at oil, it is down yet again. Well get to it in just a second. Down 2. 5 at 42. 22. Just a holler from breaking into the 30s. Plus before there was a hershey, pennsylvania there was a hershey, cuba. Michelle carusocabrera is live for us in havana. Reporter well, hershey, pennsylvania has fared a lot better than hershey, cuba. Well slow it to you right after this break when we are live from havana in power lunch. Announcer todays powerhouse is home to two foretube 500 companies. It is ranked the tenth largest metro area in the u. S. And the state bird is the chickadee. Can you name that city . Hello, everyone. Im sue herera and here is your cnbc news update for this hour. John deere says several of its workers were seriously injured by the tianjin explosions in china yesterday. Some are in critical condition. According to Chinese State media, 50 people have been killed and more than 700 injured from those blasts. Swedish prosecutors have dropped investigations into two cases of sexual Crimes Involving wikileaks founder Julian Assange because the statute of limitations on those charges have expired. Assange has taken refuge in the Ecuadorian Embassy in london since 2012. Connecticuts highest court overturning the Death Penalty in the state saying it is uncontusional. The 43 vote means the 11 men on death row will no longer be subject to execution. State passed a law in april 2012 to repeal the Death Penalty only for future crimes. A poll from Consumer Reports says americans, on average, are paying 39 more for their prescriptions. Half of all generic drugs have increased in price with onetenth up by 100 or more. Drugs to treat asthma or high Blood Pressure are among the drugs with the biggest increases. Thanks, sue. Kate is going to give us a market plash. Watching shares of houlihans. The Boutique Investment Bank priced the ipo at 21 a share below expectations. The company sold 10 1 2 million shares. Shares were trading on the noeshg undnew York Stock Exchange you should the ticker hli. Time for another market check. Looking at session highs for the dow, nasdaq and s p 500. The dow has managed to climb up to around 70 points. The nasdaq up almost. 5 . S p 500 up. 3 . Bertha coombs is at the nasdaq following the individual movers for us. Yesterday we saw the nasdaq move 100 points, dont normally see that in one day. Today providing the biggest point impact is cisco after better than expect earnings and a strong beat on revenues in sick lar and better than 20 increase on its deferred revenue. Chuck robbins saying that was a real highlight, he thought. It is also trading at nearly twice the daily volume today after of the big swoon. Most of the big caps are pushing higher. Yahoo higher today on a bernstein upgrade to an outperform. Monster upped over at Morgan Stanley to overweight which is interesting for a signed of sugaryreilly and otoe parts se all hitting highs. Checking the chinese adrs, getting a reprieve from the heavy selling we saw earlier this week. Jd. Com is still down near i had 20 for the week. A couple of high flyers hitting new lows today, keurig, Green Mountain and whole foods. Those Companies Really in need of restructuring and trying to turn things around. Keurig, worst performer in the s p so far in 2015. Thank you. Overall stocks have turned positive. The dow is trying to avoid its tenth loss in 11 sessions. Whats the smart strategy play right now . Joining me to discuss, michael eroni, lee partridge. Michael, you say dont buy the market, buy into the market. Does ma mean you this irk weve hit a nearterm bottom here . I think that the market has certainly reacted to the news earlier this week with china. What im looking for is for sectors and industries in the market that can grow their revenues faster than the overall market and then faster than nominal gdp. From my perspective thats health care, consumer di discretionary and financial shares. Health care is the best performing group in the s p 500 though the results have been a little lumpy. May is hes, kohls today were disappointing. Retail sales were a solid number today and you have a consumer that job labor market has increased. Wages have bottomed from that perspective. Oil prices are down year over year which should flatter prices from that perspective. We think the consumer is in a good spot to help with the Consumer Discretionary. Lee, you look a little more macro and outside of the u. S. Is this because of the Shifting Sands of central bank policy, as you say . Thats a big part of it. The Federal Reserve is obviously telegraphed that theyre going to start tightening plon tear policy some time in the near future. Clearly they quit buying bonds and mortgages as of november of 2014. Without that stimulus on the table while the European Central bank, bank of japan and now peoples bank of china are all assuming more accommodative monetary policy. It will definitely create headwind for u. S. Companies and a strong dollar has two impacts. We talked about this before. It not only makes the profits from foreign operations more muted, but it also makes u. S. Manufacturing less competitive on a global scale which is what everybody was talking about with respect to the china. Tell us how you are preparing for this new reality and these charges. There are a couple things we are looking at. One, we like the noncyclical element of u. S. Companies. One of the things that we really like are mlps. We think that they will perform very well during a period of falling equity prices and a strained equity market. Just because they have a very resilient income strain. The other thing that we like is going outside of u. S. Borders and we liked developed europe despite the fact that the dax is already up in doubledigit terms and japans up close to 20 . We think that theres a lot of opportunities in europe. We think emerging markets are still having a struggle and given the dissipating growth rates in china, were a little more cautious on entering into emerging markets at this point. One more tip michael from you as we talk about changing central bank policy, youve got a play for higher Interest Rates from the fed, regional banks. Regional banks. We think theyve done a good job already in terms of being able to increase space and manage their costs. With any incremental increase in rate rates will fall right into their net interest mar girgins. Credit conditions are easing in the coming quarters and we think that will benefit regional banks, too. The etf, kre. The home builders, too, hxb. Thank you, both, gentlemen. Go toll power lunch. Cn pnt kt n. Cnbclunch. Cnbc do. Com. Everyones heard of hershey, pennsylvania. Did you know there was a hershey, cuba . Cnbc chief International Correspondent Michelle Carusocabrera joins us live from havana with that story. Hi, michelle. Reporter hey withere, tyler. They were both founded by hershey. It was the middle of world war i. Milton hershey was having trouble sourcing sugar for his now very, very famous chocolate. So he did a classic case of vertical integration and he bought a massive plot. Land 30 miles east of havana and started is growing sugar cane and processing it into refined sugar. The remnants of it are still here just outside of havana. The electric railroad which were state of the art at the time constructed so he could ship the processed sugar to the coast for export to the United States. The bungalows he built for the workers in the early twenties, they actually look like theyre in pretty good shape. You can see some of the way people travel around in the area are still pretty oldfashioned with horse and bug gee at this point. The roots of some of the Office Buildings are caved in. It is a pretty sad state of affairs. Whats heartbreaking to see is the state of the sugar mill that was supposedly working until year 2000. If you look at it, youd find that pretty hard to believe. Hershey was not kicked out during the American Revolution like many other companies. The company sold the property after mr. Hershey died. Production fell year after year, then in the early 2000s the government shut down half of the production within the country. It just wasnt very effective, efficient and they werent getting a very good price for it. The sugar industry has not fared well, as many other industries have not fared well here. If you shopped for eggs lately you may have noticed that prices have gone up a lot. In fact, egg prices are 135 higher than they were just last april. The reason, of course, is the u. S. Bird flu outbreak in history and it is far from over. Thats ahead. Plus announcer the city in todays powerhouse was originally known as trimountain. Samuel adams is headquartered here. And it is the birthplace of benjamin franklin. Can you name that city . Time for our weekly trip to the powerhouse. Heres the giveaway. City is the home to the samuel adams brewery. Were talking about boston. Today we are going to look at the neighborhood of back bay. One of the nicest, most exclusive there. With us today, p. T. Vineberg. Welcome. Lets check out some stats. Median sales price in boston about 11 million with an inventory of about six weeks. Properties listed on the market for an average of 48 days. That, too, about six weeks. Lets go to our first listing, p. T. 261 marlborough unit 2. You can get this one for 450,000. Taxes just over 4,000 a year. One bedroom, one bath. Its a small place but a nice starter. Yeah, great starter home. Excellent chance to enter one of the most prestigious neighborhoods in boston, back bay with its historical and architectural significance is really kind of the creme de la creme. This is a great unit, too, for investors. It is really a solid condominium. You throw in winter at no extra cost, isnt that right . Yes. Yes. No extra cost. Little bit of snow removal costs this year though. You about et. The second listing, well up the number a little bit. 191 beacon street, probably one of the most famous streets in the city. Unit 1 listed for just over 1 million. Taxes of 11 mow. Thats pretty moderate for something of that price point. Two beds, two baths, 1,200 square feet. Thats a nice looking brown stone there, looks like. Yeah. Its a great looking brown stone. It is ideal location. Its a floorthrough unit. Private entrance on both the front and back of the building, two good sized bedrooms, two full bathrooms, central hvac, hahn dri, nice hardwood floors. Good value unit for the mid range buyer. Again could work as an Investment Unit as well. It is really a good couldnt nd. Just as an aside, quickly, if you would, do buyers today want a totally finished property . Do they want it movein condition . I feel they do, yeah. There is a big premium for that. We are starting to see pricing in back bay approach really actually exceed 2,000 a square foot for brandnew renovated units and some of the more full service buildings. Even ren vaptovated brown stone product is 1600 to 1800 a foot is the norm for a renovated place. Theres definitely a premium for that these days. Thats new york price. Zblipts its getting there. New york, washington and boston. Lets go to the powerhouse of the week. Nice, 255 commonwealth. 2,850,000. This is a spacious place. It is. It is sprasacious, all the deta that one would want in your quintessential brown stone. The millwork, the hardwoods. It really lays out great for empty nesters who want single floor living because the mast every suite is upstairs with that great room, two more bedroo bedrooms, a family and bathroom down in the lower level. If you have a younger family it works out well that way. It is definitely a top of the line property. Has parking and again, that location on Commonwealth Avenue with along with beacon street, two of the kind of marquee streets in the back bay. Looks like allnew finishes and touches there. P. T. , thank you very much. Id move into any of them. Ive got another one youd probably move in to, tyler. Todays celebrity powerhouse. Tennis player Andy Roderick and actress model Brooklyn Decker that listed their home. 4,900 square feet. Five bathrooms and five bedrooms and floor to ceiling windows throughout. Maybe they were looking for something a little more child friendly, tyler. They are expecting a baby. That is nice look at that. Id move in there. The five best buyback stocks and where to find value in small caps. Thats all still ahead so dont go anywhere. You are watching cnbc, first in busy worldwide. Can a business have a mind . A subconscious. A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . No sixth graders ever sat with but your jansport backpack is permission to park it wherever you please. Hey. Thats that new gear feeling. This week, filler paper and folders just one cent. Office depot officemax. Gear up for school. Gear up for great. Lets take a look at this hours power points. Scientists at the center of the diet coke and exercise story telling our sara eisen the New York Times got the story wrong. He says diet is a critical component of weight control but it is only part of the story. Stress management, sleep, environment and what you eat and drink. Exercise also crucial components to staying healthy and keeping your weight in check. Bob pisani reporting there is a lot of talk about whether we have hit a bottom for stocks. Did so yesterday after the big drop, then the bounceback off some technical levels. But theres not a lot of conviction today leading many on wall street to question where exactly we might go from here. And one of tvs nice guys, jimmy fallon, signing on with nbc to host the tonight show for another six years. Hell be in the chair until 2021. We would hope maybe even longer. If you missed any of the big stories in the past hour, go visit our site at powerlunch. Cnbc. Com. Tyler, in the Yahoo Finance question of the day we asked with the devaluation of the chinese currency, the yuan continuing, what worries you most . 18 say Global Growth. 41 say the impact on u. S. Stocks. 40 say turmoil in global currency markets. Thats a lot of different answers. Perhaps one reason why the selling was so intense over the past few sessions. Cashing in on cuban collectibles. Were heading back to havana live with a look at the big money in memorabilia. Coloraalifornia rolling out latest weapon to combat the drop. 1. 6 million black balls. Power lunch is back in two. Watching the prils of oil which just dipped below 42 a barrel. Lowest price since march 2009. Were hovering just above the 42 level. Obviously watching oil into the close. Other things were watching, have a look at merck shares. The dugmaker upgrarugmaker upgr outperform. Coty beating consensus. Sales fell for a Third Quarter but not as much as anticipated. Sprint got an additional investment from japans soft did the bank worth 87 million. Well continue our weeklong look at what is being taught at the nations top Business Schools as school gets ready to get going here. James ellis is the dean of the Marshall School of business at the university of southern california. And Todd Millburn is associate dean at the oland school of business. What are the two subject areas marshall has decided to focus on now that maybe werent so important five, eight, ten years ago . I think first of all it is important to consider it is globalization and our students need to understand whats going on globally but they also need to understand the entrepreneurship space and how to think entrepreneurially whether it is a startup business or whether you are working in a big corporation. How do you solve problems . Were working very hard on Critical Thinking to solve problems. Todd, how about you . Same question how does wash and olin differentiate itself . I would suspect that entrepreneurship remains a key thread there just as it is in so many of the schools around the country now. No, absolutely, id want to give very similar answer to that. We have a big focus on entrepreneurship and innovation. Really across all of our programs from our undergraduate to our graduate to our executive mba program. Handful of students that want to start their own businesses but i think most students and certainly companies are looking for folks with those entrepreneurial skills in a way that they can solve new problems, fend off disruptive competitors and those types of issues. Dean ellis, back to you. I think a year or so ago when we did this segment, an awful lot of your colleagues maybe not from usc talked about the growing importance of Data Analytics and that big data was a major thrust at Business Schools. Do you agree with that . Yes, sir. Its very important and weve got actually now we require all of our students to take courses in Data Analytics and big data. It is critical how they analyze the data. Yes, very, very important in all aspects of business. Todd, we had on not too long ago a winner of a competition, young man who was going int college d his hero his hero busines was Warren Buffett so we arranged for warren ffetto cl in and speak with this young fellow. And i asked mr. Buffett, of all the courses that yould remmend that this young man concentrate on if he wants to go into business, would it be finance, would it be marketing with being wou, would it be Investment Banking. What he said is accounting. If you dont understand accounting you dont understand business. Talk to me about that. Mr. Buffett is a man of consistency in that. I think accounting is really id even quote mr. Buffett in this capacity. If you really want to understand what a company is all about, what its strategy really is, you simply look at its Financial Statements and that will tell the tale of where the company is allocating resources, what type of activities its doing and how well it is doing those things. I think thats what mr. Buffett is getting at, you need to understand accounting because thats going to tell the tale of what a company is trying to do, where their weaknesses may be and ultimately where some opportunities may be. There dean ellis, where are your graduates going when they finish . A lot of them start in consulting so they get a sense of what es going on in industry across all lines. Many of them will start off in consulting but so many of them want to do their own business down the road. Theyll go into finance and pick up their financial skill set so that they can help themselves when they go to start their own companies. But so many of emthis want to start their own companies. Are many of them going overseas because they get more experience quicker in they go to work in india or china . They are. They very definitely are. With us being on the east coast of the pacific rim it is a real plus for us and our students are dentally working westward where the action is and where the gdps are all growing. Dent definitely. I think we have a similar student body to usc. We still see students going into financial services. We dont have the Investment Banking boon that we had before but theyve certainly been back to campus hiring at analyst and Senior Analyst level pretty extensively. We see students going overseas as well. We have programs in shanghai and now in mumbai with our executive mba. So our footprint globally has really taken off. We see students to heading to all parts of the globe and you just have to be nimble and ready to go where opportunities may be. Gentlemen, thanks you very much. Thanks very much. Thanks, tyler. Im here with Kayla Tausche as we transition from the 1 00 to the 2 00 hour of power lunch. Were watching the markets. The dow is up 507 points breaking that losing streak up 50 points. Lets look at some sectors. Consumer discretionary is the Winning Group on the s p, up 1 on the back of retail sales that came in this line for july and showed a rebound. You think about the move weve seen in oil, the potential boon that could bring as book to School Shopping gets under way in august. Were also watching financials which are up slightly today up by. 5 . Also up by 1 year to date. Interesting though within the financials it is really the insurance names that are the standouts. Weve seen premiums climbing throughout the year. Today it is a technical breakout in insurance thats moving Lincoln National and hartford. We should hit on technology before we transition fully. It is up. 3 today. It is up 2. 5 so far this year. It is yahoo today. It is that upgrade from bernstein citing alibabas longterm growth and thats leading the sector today. The theme is a reversal from yesterday because ya loo was at the bottom, financials were getting hit. Yields are higher. Things are in reversal mode. Most important point for yahoo is where it trades right before it spins off alibaba and what exactly that valuation is. Well watch that. Sara, thanks so much. See you later on today. Lets talk more about the markets. Were keeping a close eye on oil dipping below that key 42 a barrel for the first time on an intraday basis since march 2009. Bob pisani is here on the floor of the new York Stock Exchange. How are traders thinking about this . The traders were very optimistic as we started heavy selling at the open again. Then it sort of starred climbing. Then the problem in the middle of the day, oil stocks started craterg again. Thats the only sour note here. The s p 500, steady march throughout the morning into positive territory. Now in the last 20, 30 minutes weve dropped, mostly because of oil. Look at at xle, the big one for oil etfs. You can see bottoming here all throughout the last 30 or 40 minutes as oils moved to the downside. The week for the xle, this is the disappoint. Moving up all week. Everybodys been thinking maybe were finally hitting a bottom. This has happened four, five times this year and another disappointment. You cant pick a bottom for this right now. Its been very frustrating. Earlier you heard about retail sales, generally revisions better than expected helping a lot of big retailers. All on the up side. Auto parts are having a great day today. Advanced auto had terrific numbers. Look at these Auto Parts Companies today doing great. Finally the luxury names that have been beaten up this week on china concerns have all turned around. All these stocks have been beaten up this week are turning around a little bit today. We are moving in the right direction during the middle of the day. Oil again is just frustrating everybody. Bob pisani, thanks so much. If theres anyone else watching oil it is Jackie Deangelis at the nymex. Whats the mood on the floor . The mood right now is that these things can happen kind of quickly when the technical buildup comes along. They can move pretty quick. Intraday low today, 41. 92. Under that 42 mark. Intraday and probably at the close well see near 6 1 2year lows. This is significant because the markets been calling for it for quite some time. Concerns right now a little bit of the boost to the dollar that we saw today but also on the demand side. Demand from china. Demand from the eurozone. We dont see that scenario necessarily Getting Better and in the monthly reports from opec, eia and iea getting conflicting and mixed messages. On the supply side we know that supply is continuing to at least stay put here in the United States, if not rising a little bit every now and then. The last few weeks weve seen rigs come back online so something in this equation has to change, whether its the dollar or supplier or demand. We have to see something change. If we get a close at this point under 42, we could see support at 40. If we break through 40, weve got that threehandle coming up next. Now to a commodity found in almost every household in america eggs. If youve been to the Grocery Store lately youve likely noticed prices have gone up a lot. In fact egg prices are 142 higher than just last april. Reason is the worst bird flu outbreak in history and it is far, far from over. Morgan brennan is live at the iowa state fair with more of the impact on consumers. Reporter first lets talk turkey for a minute. Those prices have been climbing as well. In the midwest some stores are grappling with the shortage of turkey deli meat. The first farm here affected in may. His new birds just coming in to his facilities should start to hit the market later this fall. Farmers in minnesota are also coming online. But so far it is turkey, not egg facilities, which were the hardest hit. We anticipate there will be birds back in barns as early as september in some cases. Certainly ramping up through the end of this year and really strong egg production coming back on the start of 2016. Reporter still, it is going to take 12 to 18 months for u. S. Egg production to finally ramp back up to its normal levels. Meantime, egg prices are skyrocketing. Market Research Firm earnerberry says wholesale price of a dozen midwest large eggs has jumped more than 140 since april when bird flu started to hit the midwest in a big way. Priced are expected to stay elevated into next year but as producers here are slowly beginning to get back to business, the industry is also bracing for another round of bird flu. Thats expected this fall as wild water fowl that carry the virus fly south for the winter. Farmers are beefing up biosecurity, they are take regularly testing their flocks and the usda says that it should have a vaccine ready if need be. Still, heaven forbid we see the type of damage we saw back in the spring again this fall from bird flu. Bb t capital has warned that consumers could end up paying as much as 6 per dozen at the store. Tyler . Back to you. Ill kick it over to kayla. Thanks very much, morgan. Another big story that could impact the consumer is a management shakeup at dow component and another household name, cocacola. The Company Naming James Quincey president and ceo promming questions whether he could be the future coo. Peter, you own about a million shares of coke. Thanks for joining us today. Your initial reaction to this news today . You know, such a deeply researched company as cocacola, any insight we can get thats out of the blue is a pretty good thing to use. I do think it gives us a little bit of hint as to whats going on in the boardroom and what kind of Strategic Decisions theyre making. So i think it is a good thing, on average. One of the things we are looking at is of course mr. Quinceys background in the International Arena and in deal making. So if you want to extrapolate why coke is doing this, its pretty obvious. Right . That theyre probably going to be looking for an International Growth and perhaps on the m a side. So perhaps this means that coke increasingly will be focused on international operations, if its possible to do that more so than it has already, do you think though that there needs to be outside consideration and possible external candidate if and when that success conversation actually begins to happen . Well, i certainly were not in the boardroom so we can only speculate at this point. But true governance would obviously suggest that you have to do a wide, wide search for that. So yes, im hoping that it is whatever comes of this, that the results will be from a wider search. Certainly not just within the insider area. There are pros and cons to both. Right . You have somebody with 19 years of experience. They know the industry. They know the players. Thats a positive thing. However, in an industry such as carbonated drinks, you probably need all the creativity you can possibly muster because it is such a crowded space. So perhaps an outsider would lend some new insight that maybe an insider would just be too shaded to have. It is interesting to see the coo role get filled because there hasnt been an executive in that role kent kesince kent resigned that post in 2008 to become ceo. Do you think this lets him focus a little bit more on longterm strategy, and if so, what that means . Well, certainly. I, too, am very perplexed that that position, the coo position, was left vacant beginning in 2008, i believe. Thats highly unusual especially for a company like coke that is so, the model, if you will, the model fl Corporate Governance and responsibility. If you leave that door open, that does raise some questions asto whats really going on in the boardroom when they try to make that decision. So the jury is still out on that. Im just flood theyve moved forward. Given this competitive landscape, if you want it on the negative side of this, i would say this that the changes that have been announced today, its almost like bringing say a knife to a gun fight in the sense that the challenges that coke and its competitors have are so large that im not sure just this one change would be enough. I do think im hopeful that this might be the beginning of a significant change at the higher level to meet the new challenges. Maybe, peter, a lot of investors feel like that. Maybe thats why the stocks down. 3 today, bringing a knife to a gun fight. Well see. We appreciate it. Lets get you caught up on some stock headlines at this hour. Shake shack taking a big hit after pricing a secondary offering of 4 million in class a shares at 60 a piece. You see shake shack now trading below 59 a piece. Down almost 10 . Omaha based Union Pacific announcing plans to cut hundreds of management jobs. This comes as the railroads coal shipts continue to plunge. Union pacific says coal volume dropped 26 in its most recent quarter. That stock down more than 20 so far this year. A handful of names are hitting new alltime highs in todays session including auto zone. Spectacular numbers there. Home depot and constellation brands. Kate rogers as a market flash. Energy is the performing s p 500 sector as crude dips to a 6 1 2 year low. The sector is nearing session lows down over 1 . It is being dragged down by big names, all down between 5 and 9 . Heres your power menu for the rest of the hour. Goldman sachs is riding the buyback boon. Coming up, the five stocks the firm really says pay to own right now. One fivestar fund manager will tell us where he is putting his money to work in todays market. Later, a stunning meteor shower expected to light up the predawn sky overnight but you dont have to wake up early to catch it. Weve got some video and it is coming up next. As kate rogers just mentioned, we are also keeping a close eye on the Energy Market with crude reaching its lowest level in 6 1 2 years. Much more coverage coming your way as you watch cnbc, first in business worldwide. Shopping online. Is as easy as it gets. Wouldnt it be great if hiring plumbers, carpenters and even piano tuners. Were just as simple . Thanks to angies list, now it is. Start shopping online. From a list of top rated providers. Visit angieslist. Com today. Stocks coming off the lows making a turn into positive territory following the close in europe. Lets get more on todays market action. Joining us, collin moore, global chief Investment Officer at columbia thread needle investments, you have half a trillion dollars in assets under management. Welcome to power lunch. Thank you. Word on the street here today and yesterday is oversold. Do you buy here . I think there are more structural issues than volatility that were seeing at the moment so i do think you need to be cautious. The reaction to the events in china, et cetera, is really a reaction to saying its Global Growth coming through as we expected and the markets trying to adjust to that. I dont necessarily feel that we are through that yet. On the other hand, i dont think that equities are heavily overvalued so there is a bit of an opportunity. But i would be much more stock by stock than saying jump in to the market right now. Where is your biggest sense of caution coming from, colin . From europe . From china . It is the overall Global Growth but you are right, the latest thing tends to be china. Kurn currency devaluation i thi a symbol of whats going on there and is the level slowdown greater than the world actually expected. Everybody knew it was going to slow down, but is it going to be more. Is europe actually going to accelerate or is that going to take longer. So i dont think that were having necessarily a recession, but were not getting necessarily the level of growth globally that the current multiples in both europe and the u. S. Seems to be requiring. Perhaps thats one reason, colin, why some of the leaders in the market have been verizon, wells fargo, companies that really dont have that international exposure. But on the flip side, if we do get better growth than expected in europe and asia, you miss out on some returns. How is this all driving what you are buying in the market . I agree. I think just relying on sort of the standard utilities, the verizons, et cetera, is somewhat limited. I listened in to the report you gave there a few minutes ago on energy. As i look through Energy Stocks, like Royal Dutch Shell yielding nearly 7 been even though the oil print isnt performing that well, as they begin to cut their Capital Expenditures and hence reserve that dividend yield, it may be areas like that that would benefit if we get better information on growth but also youre sort of getting this yield payment to wait and see what comes through. Thats a bold call, colin. Well leave it there and see if that ends up being the right call at this point in time. Colin moore from columbia thread needle. A new twist in an Insider Trading case that involves the golf golfer Phil Mickelson. Kate kelly has details. A possible explanation today for abruft resignation last friday of dean foods nonexecutive chairman thomas davis that government investigators believe he may have leaked inside information to a better who shared it with pro golfer Phil Mickelson. According to the wall street journal and statements from some of the parties today and in recent days, the s. E. C. Has been investigating a potential Insider Trading scheme involving nonpublic information on dean foods for some time and the u. S. Attorney in manhattan is involved as well. One theory now in play is that davis a board member of deans since 2001 shared knowledge of spinoff plans for a Company Subsidiary called white wave foods with the professional better billy walter some time in 2012. When it broke publicly in august shares were driven up 40 . The theory that the tip was passed on to Phil Mickelson at a time when it was not publicly allowing him to potentially trade on the news. Still much emairemains to be revealed. One powerful counterpoint so far, a statement from davis lawyer who says, among other things, davis had no knowledge of any material nonpublic information about dean foods being communicated to walters by anyone at any time. Pretty definitive. Others including the justice department, s. E. C. And micklesons agent have declined to comment on the case an dean foods which hasnt moved much on todays News Stressed that it is cooperating with the governments probe and that davis departure was voluntary. Obviously not tied to this investigation. Thats what they would argue. This happening friday with no real explanation, then the New York Times monday foreshadowed it and a more definitive story in tthe journal today the u. S. Attorney hasnt commented. Inassu i assume he will. Im sure by the end of the day. No case has been brought. Goldman sachs telling its clients to pile in, pile in to stocks with large buybacks and dividends. Sue herera is here with us. Sue, goldman names five in particular. Which stocks are they . Goldman sachs says this year is going to be the biggest ever for cash returns and corporate buybacks, telling clients these five stocks are good bets. We want to share them with you. Anthem, darden restaurants, General Dynamics, Illinois Tool Works and kimber bkimberleycla. Darden restaurants having a strong year with the stock up close to 24 year to date. Its also up slightly over the past month despite volatility into its particular sector. Moving on to General Dynamics which is up 3 this month and more than 9 for the year. Illinois tool works falling more than 5 this year and 4 over the past month. It has really had some tough sledding. Kimberly clark up over 4 over the last month and up just slightly for year, all of these on Goldman Sachs list. Well see, maybe something to add to the portfolio for someone who has a longer term time horizon. Always the beft way to invest, in my book. Go long or go home, baby. Ill go long i dont want to go home. You know whos playing tonight . Green bay is playing tonight. Playing patriots. The deflatables. The cheeseheads and the deflatables. I got the cheese head at home. Its ready to come out. Read more about how Goldman Sachs is writing this trend on p. M. Cnbc. Com. A little more than 90 minutes left of the trading session on the new York Stock Exchange. Some market etfs trading right now, the s p 500, spy, is up by. 25 , though the 20year barclays ishares is down by the same amount. The gdx down 5. 5 . Thats following the broader move in the commodity complex. When we come back on power lunch, bigmoney picks from one fivestar fund manager. And our own Michelle Carusocabrera live in havana with the story of how people are cashing in on cuban collectibles. Michelle. Reporter hi, there. Cuban exiles living in the United States have such an obsession with free cash for cuba, theres a guy whos actually made a business out of it. Do you want to know how hard it can be to breathe with copd . It can feel like this. Copd includes chronic bronchitis and emphysema. Spiriva is a oncedaily inhaled copd maintenance treatment that helps open my airways for a full 24 hours. Spiriva helps me breathe easier. Spiriva respimat does not replace rescue inhalers for sudden symptoms. Tell your doctor if you have kidney problems, glaucoma, trouble urinating, or an enlarged prostate. These may worsen with Spiriva Respimat. Discuss all medicines you take, even eye drops. If your breathing suddenly worsens, your throat or tongue swells, you get hives, vision changes or eye pain or problems passing urine, stop taking Spiriva Respimat and call your doctor right away. Side effects include sore throat, cough, dry mouth and sinus infection. Nothing can reverse copd. Spiriva helps me breathe better. To learn about Spiriva Respimat slowmoving mist, ask your doctor or visit spirivarespimat. Com if you happen to be awake at. 00 a. M. , go outside and look up because you might see as many as is 100 meteors streaking across the sky. You are looking at the perseid meteor showers which hops when the earth passes through dust, gravel and other debris. This dust comes from a comet. Some people would say 3 00 a. M. Is a night owl. Not a morning person. Leave it to others to judge. Very, very beautiful images there. Chinas central bank trying to restore calm to the Global Markets after the country devalued its currency earlier this week. During a News Conference held overnight, the peoples bank of china said there is no reason for the yuan to fall even lower although the yuan did continue to slide again today and that marked its Third Straight day of declin declines. The thought is that the pboc wants a controlled descent, not a plunge. Checking in on some of the main china etfs all trading in the green. Right now of course their markets are closed, it is middle of the night there. But china up 2 . Ftse china up 1. 3 . This is one way you can play it while the china market is closed. But the devaluation of the chinese yuan may seem like a win for Small Business importers because after all, it would be cheaper for them to bring in products that are made in china. For companies that actually employ u. S. Workers the situation might not be that simple. Kate rogers joins us now with that story. On the surface this is a win for small importers like manager of the phoenix faucets. They make 40 ever its gross Sales Revenue from faucets and plumbing products mainly from china. Remaining 60 are made in america. What that means for me as we go forward is as a buyer, i may have more leverage with the suppliers because they dont have as much Business Activity as they did and we may with the stronger dollar be able to negotiate better deals. But its also putting him in a position of pitting his imported products line against his own made in america goods. Customers will tend to move to buy the lower price product so it actually while i get the benefit of buying lower price components and assemblies because it competes with my other lines, my domestic faucets will probably see some erosion. As Global Markets and big businesses are watching currency moves closely, so are Small Business import exporters. Much more on cnbc. Com. From china to cuba we go. After 54 long years the United States and cuba reestablishing diplomatic ties. For the people of cuba a lot has happened in those 54 years. Our chief International Correspondent Michelle Carusocabrera is live in havana and a look at some cuban collectibles. Thats right, tyler. Imary here in havana, 90 miles away across the straits of florida with thousands it of cuban exaislilesexiles. They are obsessed with what cuba was like before castro took over in 1959. So obsessed there is a cuban american now who has an Online Business dedicated to that nostalgia. Also the match boxes of that era. Reporter for some these tring kets are trinkets are what was lost during the cuban revolution. But for some, they are treasures. Jer jerry collects and sells them through his online store. There is that interest, that point in history. There was a lot of history way before castro. Reporter letting anyone own their own little part of precastro cuba. His collection is a flashback to cubans golden age. Cuba was a fascinating place. There was even at one point in time where their peso was actually worth more than the american dollar at the time. Reporter a surprise to some may be the familiar brand names throughout the collection. It says company bottled in havana. Reporter among the collectibles, drink stirrers from the celebrity filled nightclub scene. Poker chips from the mafiadriven casinos. This is the most famous nightclub in the world at the time. Reporter collectibles like these have been popular long before the u. S. And cuba decided to reestablish diplomatic relations. I discovered this company because i was trying to figure out how to find the locations of the old american headquarters of the seized companies and i came across this online. It is a reproduction of the 1959 havana phone book which jerry sells at his site. It is not the original. It is a reshun. People actually buy a reshun of the phone book. In fact i bought one for work, then i also bought one for my mother for christmas and she really liked it. Where is his business based, michelle . If i might ask . Its in miami, florida. Hes got a little warehouse but it is exclusively online. He doesnt have a store front. Exclusively online working out of miami. Michelle thank you very much. Lets point out that stocks are at or very close to their session highs. The dow at 17,000. Up 70some points. There is the s p 500. Going the other way is oil. It now sinking to 6 1 2year lows. Jackie deangelis is at the nymex for the close there. Good afternoon to you. Wti finishing the session at 42. 23, 2. 5 drop on the day. Whats interesting is a lot of the volume came in the last two minutes as we headed into the close. We did come off session lows but still down a little bit more than 1 on the day. What was more significant was the intraday low, 41. 91. A sixyear low also taking out the year to date intraday low. These are very significant levels and traders continue to tell me a settle which were very close to under 42 will probably take us down to the next leg. Today you had a little bit of a stronger dollar hurting crude and also the same issues persist with supply and demand as well and worries about whats going on abroad. I will say this. We have to make sure that we settle under that 42 level to see that 40 as a support. But the three handle a lot of traders are Say Something not far away. Were talking about that last hour. Jackie deangelis, thanks. To sue herera for an update. Heres whats happening at this hour. Citco group agreeing to settle claims against the biggest operator of feared funds to bernie madoff. Rand paul continues to trade jabs with donald trump while campaigning in new hampshire. He questioned whether trump is really a conservative republican. Last night trump said the kentucky senator has no chance of winning the nomination. Union pacific will cut hundreds of management jobs as the amount of coal shipped by railroads ting to plunge. Omaha rail Company Reported last month coal volume dropped 26 in its most recent quarter. Sesame street, the long time resident of pbs, is getting a second home at hbo. The premium cable channel and sesame announcing a fiveyear deal. Beginning this fall episodes will first air exclusively on hbo, then be available free to pbs stations after nine months. Thats the cnbc news update this hour. Right after a quick break, the ceo of a key player in the natural gas and Oil Exploration space. Back in two minutes with power lunch. 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What if there were only one kind of dog . Then it would be easy to know everything about that one breed. But in fact, there are over three hundred breeds of dogs. Because no one can be an expert in every one. An app powered by ibm watson will help vets tap Specialized Knowledge in the cloud for every breed. And whatever else walks, flies or slithers through the door. Ibm watson is working to make medicine smarter every day. The drop in oil prices hitting many Energy Stocks very hard. But shares of the oil and gas company matador resources are up more than 10 so far this year. The stock is down about 6 over the past month, however. Here for a cnbc exclusive, joe faran, thank you for being here. What do you think or feel on a day like this where you see the oil price go to a sixyear low . What does it do to your stomach, let alone your business . Its just part of the process that needs to be done for oil and gas to come back in balance. Laws of supply and demand work. This is painful at times, with you it is also healthy. It brings out some of the best in the industry. Youre a big player in the Eagle Ford Shale area. Right . We have been. Were actually more active now in the permean. Yes, sir. Tell me why you think your companys shares have been able to hold up better than some of your competitors and others in oil and nat gas . Well, thank you. The first reason is that i believe were in the right area in the Delaware Basin of the permean. These wells are a Million Barrels of oil or gas equivalent so it is a great set of assets. Were able to drill and complete them for low cost. Then i think another reason is we have a strong Balance Sheet. We have less debt. Less debt. Thats the thing a lot of the people are worried about a lot of the companies in this area, that they are overlevered. As the price comes down theyre less able to make the payments that they need to. I think thats true. This is something that weve watched for years. Weve been around in one form or another f35 years and this something weve watched. Weve founded grassroots, friends and neighbors. When you have friends and neighbors and in some cases inlaws, you can be sure you watch the Balance Sheet pretty carefully. What do you think is next for the price of oil and natural gas. What do you expect to hope for the next six months as we move into a Lower Driving time in the United States but a higher heating time . What youve seen in 2013, 2014, production in the United States increase 16 or 19 each of those years. This year its been relatively flat. A supply and demand curve youve got the supply size coming down but demand is going up 3 to 5 . I think most important catalyst to watch is worldwide demand is increasing 5 and while the saudis take a large share of that or will they let the rest of the world absorb it and if so, then youll see prices come up but if they insist on taking 60 of it, then and putting it have lower prices. Yes, sir. Mr. Foran, thank you very much. Congratulations on your success. Thank you so much for having us. Nice to meet you. Matador stock just turned positive on session. Coals cratering today after earnings down more than 9 . It is down 25 in just the last three months. Fellow retail stock macys also on the downside. Ceo Terry Lundgren admitted that it was going to be a secular program yesterday following those earnings. Lets ask trading nation, ari wald is a Technical Analyst with oppenheimer, dennis david is with harvest volatility advisors. Ari, do the charts tell you that the is over for these companies . It doesnt say the worst is over but they do say that this is an industryspecific issue for multilines here. Hard lines are performing. Consumer discretionary sector as a hold has been in a steady up trend for years. Lets take the big picture view of kohls. Its been in this big 15year sideways range. No up side progress since 2000. Once again we have this inflection from 80 resistance. That marked the peak in 2002 as well as 2007. The lower end of that range, thats 45. Were not there yet. The stocks in free fall. No base yet, no support. Dennis, what about this idea from the fundamental side that prices at the pump are going lower. Consumers will have more money in their pocket. Were in the middle of back to school. Do any of these play into the fundamentals . They do play into the fundamentals. But i agree with everything ari said. If you look at cokohls, its retraced to where its been. Macys saw a selloff in their stock yesterday but that stock has gone straight up relative to kohls. I look at how you limit your risk and your exposure in these two stocks. I would use options. If i owned macys, id be worried about Something Like kohls happening. I would buy puts to ensure my portfolio there. In terms of kohls, if they rebound to the top of that range again, buying call options in a stock like kohls is a great way to participate in the up side but limit your risk to the downside. If kohls does roll over and go to the bottom of that range, you want to limit the amount of money youre going to lose. Thats always the name of the game. A fivestar rated fund manager will tell us where he is finding value in the small caps. California is throwing some serious shade at its devastating drought. Well explain what youre about to see ahead. Plus my name is les hudson and i get paid for this. What it takes to design rides for six flags coming up on power lunch. Announcer and now, the latest from tradingnation. Cnbc. Com and a word from our sponsor. We are very near the highs of the day for equities across the board. The dow up 67 points. 20 for the nasdaq. Russell is up. So is the s p 500. So you see green numbers on the board there. Small caps part of that rally. Over just the last few hours. Over the last month though, small caps are down 3 . Lets bring in andrew maury, rated five stars from morning zl star, up 19 in the last year. Andrew, where are you finding value in small caps . Were still finding opportunity in small caps in many different areas. We have auto dealers, some restaurant holdings, some buildings materials holdings. We still think offer a lot of tremendous growth as well as good valuations. You tend to think of small caps as domestic plays but it seems like they have been vulnerable to some of the international jitters as well. Will that fade over time . Yeah, i think actually it will. Actually the last week or two youve seen some of those jitters and youve seen small cap underperform very modestly versus s p 500. However, going back the last 12 months small growth has outperformed by six or seven basis points because we have a stronger u. S. Dollar, large caps are relatively more exposed to that and more exposed to the foreign currency losses, the cocacolas and Procter Gambles versus a small cap holding which is muchdomestically fundamental fundamentaled lithium motors, 3 billion market cap. We like them. Lithia is a rural more focused car dealer. It is a manufacturer, but they are a car dealer. Doing really well as auto sales have come back up from the 9 million unit lows of march 2009 up to 17 million, almost 18 million unit now recently. We see that continuing, one. Two, lithia has some specific acquisitions theyve done that already are very creative and we think could have more up side. Quickly, you also mentioned bloomen brands. What do you see in the fundamentals of that company . They have a couple different brands. I think thats where some of the confusion and misperception can happen. They have carrabbas which has been generally okay. Bonefish grill which has been tougher recently but the vast majority of their sales is Outback Steakhouse and thats been doing relatively well. We think they can continue to grow but we think theres going to be potential for further Margin Expansion later this year but especially next year. Andrew, we appreciate it. Andrew morey. Time for our regular series where we meet people with cool jobs. Today a man whos business has lots of ups and downs. My name is les hudson and i get bad to desipaid to design rr six flags. Every day is a little bit different. Were doing a lot of multitasking. On everything from roller coasters to designing kids areas. Boomtown is not just a ride it is a whole area designed from kids from water rides to playground structures to car rides and tower rides. Its really a great stepping stone for kids to ride rides with their parents. The most challenging project would be our new justice ride. This took over three years. It is like riding through and playing a video game with full range motion vehicle, interactive gaming, 3d video, special effects like fire, wind, and vibrations. And really the key is to make sure thats all synchronized and so that a person basically suspends believe and feels like theyre in the journey. I enjoy the creative process. To be able to build attractions that we can actually see people enjoy, i believe i have the coolest job job in the company. That is a pretty cool job. To find out how many roller costers hudson has ridden, go to powerlunch. Cnbc. Com. Michael jordan is in federal court in a suit how much his image is worth. Its got to be the shoes. Back in two. It took Joel Silverman years to become a master dog trainer. But only a few commands to master depositing checks at chase atms. Technology designed for you. So you can easily master the way you bank. No sixth graders ever sat with but your jansport backpack is permission to park it wherever you please. Hey. Thats that new gear feeling. This week, filler paper and folders just one cent. Office depot officemax. Gear up for school. Gear up for great. Former nba superstar Michael Jordan is in federal court. The 14time nba allstar is suing a chicago area supermarket for using his image in a 2009 ad that included a 2 steak coupon. Court documents now made public show how much jordan has made from his sponsorships over the past 13 years since he retired. The numbers are quite remarkable. This is the first time weve seen it laid out this way. This came out yesterday in court discussions. They are making the case hes owed millions of dollars, and they revealed numbers weve never seen. They were so sensitive the sponsors didnt want the public to have access to the courtroom. Nike paid jordan almost 500 million since 2002. Thats almost 40 million a year followed by all these other deals over 10 million. Sirius, gatorade, hanes, upper deck. This is why hes a billionaire. Hes the first athlete to ever be a billionaire. If you look at his appearance fees, these are 5,000 to 500,000 per appearance. That is what this fight is over. Should he be getting paid an appearance fee or endorsement fee . They want at least 10 million. I will bet you he doesnt do so many appearances for 5 grand. Thank you very much. Cities and towns tried water rationing. This is the latest solution and may be the most bizarre of all. Jane wells, they are dumping plastic balls into the los angeles reservoir. Why . Reporter tyler, its 100 degrees out today. We need shade. How about shade balls . Theres 96 million behind me. Has l. A. Gone crazy . Dont answer that. Well explain. Ke a pill . Ke 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. 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So while the ones on the left are waiting, the ones on the right are pulling power out of thin air. Pretty impressive, huh . Now, two things that are exactly the same have have never been more different. Ge software. Get connected. Get insights. Get optimized. Los angeles, a town desperate to conserve as much water as possible under its recordbreaking drought may have come up with a novel new way to preserve the water in its reservoir. Jane wells brings us that story. Novelty, solution, both . Reporter and allege lid cheaper. Adopting interesting technologies to solve expensive problems like the one behind me. This is the van norman reservoir. It is covered in 96 million shade balls. The last one was dumped in this week. 20,000. They perhaps saved 300 million gallons of drinkable water from evapora evaporating. They are colored with a chemical to block uva light and keep the water cleaner. Someone shouted, shade balls away. We were ordered by the epa to cover our reservoir. We are looking at 300 million the rate payers had to pay. We came up with putting these balls, shade balls, 96 million at a cost of just 35 million. Im not sure where the 3 million figure comes from but they said that would be the cost of putting the Worlds Largest pool cover on here and building a temporary reservoir. This is almost 90 cheaper, supposed to last ten years. Today nasa saying the only winter we are getting is a godzilla, it could be a very wet weather in california. Are they like a mcdonalds ball pit . Are they bouncy . Yes. Let me get you the other one. Hold on a second. They are the same kind of ball you would have in a mcdonalds fun tank. They have a special coating to deflect uva light. They are partially filled with water so they wont get blown away. This is 175 acres. Wind could blow these balls around. Thank you very much. Thanks for watching. Kayla, thanks for anchoring today. Any time. Closing bell starts right now. Welcome to the closing bell. Im kelly evans at the new York Stock Exchange. Im bill griffeth. Oil has been a big story today. Wti crude in the u. S. Breaking below 42 a barrel for a time. It his a 6 1 2 year low today. Well take you live on the floor of the nymex. The debate about the impact the oil decline could have on the markets longer term. Art cashin poichbting to