Transcripts For CNBC Power Lunch 20130802 : vimarsana.com

CNBC Power Lunch August 2, 2013

Offer from michael dell but the question is will shareholders agree when that vote is taken, now schedule not from today but for a month or so from now and escaping the group. A now power lunch production profiling men and women who have had it with their day snobs. They are instead finding ways to to cash in big time. A great story, ty. Cant wait to sayre that. Lets look at the back of the not so super jobs report and what its going to the market. Dow jones industrial average off about 17 points, s p 500 down a fraction trying to edge towards the unchanged level. Nasdaq positive and the russell 2000 down just a fraction. The gold market last i checked turned mildly positive. Brent crude trading down half a percent and the yield is 2. 62 but the yield has been all over the map. Lets explore the benchmark tenure. Lots of ups and downs, traders committing and taking it back and recommitting. Lets see what will happen over the weekend starting with bob pasini right on the chart. Its amazing. We were 2. 75 yesterday so if youre trading that its it has been a frenetic week. And i think a lot of people got caught because the whisper number on the nonfarm payroll was 200,000 and above and im surprised the market is holding up so well. Take a look at Dow Jones Industrial average. If it wasnt from chevron being down wed be well into positive territory. Big disappointments in the oil names. Refiners, problems with the refiners, refining capacities in the last couple of Earnings Reports, so all the refiners are to the down side. Big oil is disappointed simply because theres been refining problems and royal dutch and exxon and chevron and bp have all missed and missed notably in the last couple of days. Semiconductors, downgraded the whole sector to neutral. And not just pc demand. They say high end smartphone sales may slow down so some of the big chip names, downgraded broadcom and everybodys favorite qualcomm on the upside and finally, sue, youll notice, the vix is collapsing here. Right. Down 12, the lowest almost 7 . March was essentially a sixyear low so were sitting right near the bottom. Makes me a little nervous. The value of that vix is not so great anymore. I know, thats what im saying. I dont think its reflecting what the market is really feeling so thats a whole other discussion. Lets talk about the weaker jobs report that pushed the stocks lower. Is the economy being overrated . Are investors expecting too much and James Bullard, st. Louis fed president , said the committee needs to see more data on Macro Economic performance for the second half of 2013 before making a judgment on the taper. Lets bring in Kenny Polcari along with tyler, and in washington bill rogers joins us again, a professor from rutgers and former economist at the labor department. Welcome to you all. Kenny, ill start with you. I want to take off on mr. Bullard because thats really the newest new peg to the market. Goes right to the point. Hes right. Need to see more data. As much as we continue to think its starting to turn and in some points its starting to turn but this was a big number and big miss. The whisper number was plus 200,000 so plus 160,000 is not the worst thing in the world but not the number the fed needs so once again it pushes that whole september conversation back which is why you said the market is not collapsing a little bit more because people are once again security ben is not going anywhere. Fed chief is here to stay. Id like to git get professor rogers into the conversation here and lay out a hypothesis and that is the economy is roughly stuck in the monday. As i look at the jobs numbers this morning i see sort of two economies, one that is that is thriving reasonably well and another that are having to take parttime jobs, lowpaying jobs in retail and food service and a lot of people dropping out of the labor market and in and economy where you have so much of our shared prosperity depending on all consumers having money to spend, this doesnt feel like what were seeing. What do you think . I agree with you. The way ive been describing this economy or recovery since february 2010 when we began to have private sector job growth its a pothole recovery, if you have education and the Strong Networks and live in the right communities you can prosper and do well in this kombu if youre in a community where youre seeing large suits in education and training and other social investments and jobs arent growing youre hitting the pothole and also were stuck in the mud. Like a 5050mileperhour economy. A little bit of rev up that we might continue to accelerate but clearly thats that wasnt the decision this month. Theres a lot of talk from guests that we have on that say the economy is fundamentally changed, that the jobs market has fundamentally changed, that were not going to see a large number of the jobs that were lost ever come back and we need to get used to a higher rate of unemployment bows those who are not skilled are not get jobs in whats eventually, you know, a changed economy. Think about that for a second as we go to a market plash. Were watching illinois toolworks. We have a nice intraday pop. Giving more back to its shareholders, declares a dividend of 42 Cents Per Share. The board also authorizing a 6 billion Share Repurchasing Program and you can see the move in the stack. Itw up about 20 this year. Im going back to the professor because you got an extra 30 seconds to think about that but what do you make of that hypothesis . I think its interesting. Weve been into 20, 30 years of the structural change where, you know, technology and globalization have basically they rewrote the rules of how we work, where we work and with whom we work and weve had the recession where i think, you know, players had really ramped up and pulled back and now waiting for the consumers, 70 of the income to take off again to where they are willing to raise hours of employees and also instead of hiring temp workers andport time people and move them back to fulltime, but you are right. I do a lot of work with the free landers union out of new york and their membership, the Fastest Growing union that theres a structural shift and were seeing more and more people into this economy. Does it mean we need to reright the social contract, workers used to share in the growth but in the last 20, 30 years, that is broken. Getting productivity growth but not wage growth and thats part of the resentment out there. What do we do about that . To answer your question. Sequestration and hitting the budgets with a big hammer in across ott board cuts, that was wrongheaded. The National Council on nonprofits, they have canvassed and surveyed the 50 states and looked at sequestration, and one of the programs thats taken the biggest hit is head start and nobel economists in chicago have found and done research and showed, that you know, amazing economic returns. Head start is a program that provides Early Childhood development for low minority children. Have cuts, lower jobs, and youll lower productivity in the final and the final of the other piece is it centers around institution, Public Policy and even the Federal Reserve said fiscal policy is contributing to some of the slack in the economy, that, yes, we can have rages growing but we need the federal government and Public Policy to help al gate those rages. Thanks very much. Professor, kenny, bob and sue. Well see you in a couple of minutes and when it comes to jobs. One key sector were watching is defense. In a year its up about 53 , but what about the jobs in that sector . Half. On pearson with more live in washington . You have to go inside the numbers but were starting to see concrete xemples of the sequester impacting private sector jobs. Nonauto transportation equipment manufacturing, which includes aerospace and ship building, was down 7,000 jobs last month. Now, remember, private employers dont have the luxury of furloughing workers. Weve been in contact with defense contracts who have had contracts cancelled and had to lay off highly skilled workers and risk losing them to competitors and part of their revival strategy also includes hiring more parttime workers to control health care costs. Starting to see the imprint of both obama care and the sequester. The people moving from fulltime employment to parttime for furloughs are really picking up right now, all kinds of anecdotes in the contractors to the defense try. Economists and analysts who track defensesensitive try bay beginning in the spring we started to see a slowdown in job growth while the rest of the economy was in fact trending upward. Tyler . Thanks very much. Lets go to the story that keeps on giving. Dells stock up today after the board approved a better offer from michael dell and his partners silver lake. The stock is up 5. 5 over the last week but is it really now a done deal . Josh lipton watching it all from the market desk. An agreement has been reached with the buyout group led by ceo mike dell to purchase the company for 1375 per share, the group tacking on a onetime shareholder payout of 13 Cents Per Share which michael dell is personally purchasing. We are pleased to have won another battle in the dell war, said carl icahn, but the battle itself is over. More to follow, says mr. Icahn. Shareholders were scheduled to vote this morning on a lower offer to buy the company for 1,365 per share and now shareholders who only stock as of august 13th will be eligible to vote at a september 12th special meeting on the new deal. Brinkler international bigger on the week and the gains came own though the company missed on revenues. If theres no deal in about three and a half house, cbs and showtime may be turned off to the millions of people who subscribe to twc, Time Warner Cable, and the bear so many people are talking about today. See what this i gos been up to when power lunch rolls on. These are smart animals there. Golden opportunity sales event and choose from one of five lexus hybrids thats right for you, including the lexus es and ct hybrids. This is the pursuit of perfection. [ male announcer ] come to the golden opportunity sales event to experience the precision handling of the lexus performance vehicles, including the gs and allnew is. This is the pursuit of perfection. Shares of dish are losing ground earlier in todays trading session. They have just ticked into the green. Its customers in 36 markets were blocked by raycom media from accessing various local television channels. This is all over a dispute in transmission fees and dish accounts for a full 15 of raycoms viewers. Dish stock is up 22 for the year and raycom is privately held and the cable space is moving on some takeover talk. We begin with reports that Charter Communications ant privately held Cox Communications have held merger talks. Thats moving charter to the upside by better than 4 today. Time warner has been losing ground on the perception that it will be left out. Previous reports had liberty media, which has a 27 stake in charter, interested in merger. Speaking of cable, problems of its own, time warner and cbs still facing a following. Reporter 3 million subscribers in new york, los angeles and dallas could lose access to cbs and showtime. Now, cbs shares have shot higher since its Earnings Report on wednesday. During the Earnings Call Ceo Les Moonves defended the companys position saying, quote, we think he who has the most eyeballs should get paid the most saying, quote, there are hundreds of channels but most people are watching 10 to 15 of those and were one of those. In many homes were number one. On time warners cable call, the incoming ceo rob marcus shot back saying were very focused on assuring we obtain reasonable pricing for the programming our customers value so that we can ensure that they can pay reasonable prices for our video services. Now while cbs wants to be compensated for its ratings, Time Warner Cable is afraid that passing along higher prices would send subscribers running and higher prices hurt Time Warner Cables results this past quarter so, sue, if theres a blackout nobody wins and the block is tick. It sure, is julia. Thank you. Hot ipo to tell but today. Control4 shares up almost 23 . This helps turn your humble home into a smart home. Are you turning your home into hackers . Control4s ceo joins us and if a piece tur was found liable for defrauding investors. What this big win for the s. E. C. May mean for Hedge Fund Titan steve cohen and then theres this guy, the bear. More power lunch in two minutes time. Customizable charts, powerful screening tools, and guaranteed 1second trades. And at the center of it all is a surprisingly low price just 7. 95. In fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. Im monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. Humans. Even when we cross our ts and dot our is, we still run into problems. Thats why Liberty Mutual insurance offers accident forgiveness with our auto policies. If you qualify, your rates wont go up due to your first accident. Because making mistakes is only human, and so are we. We also offer new car replacement, so if you total your new car, well give you the money for a new one. Call Liberty Mutual insurance at. And ask us all about our auto features, like guaranteed repairs, where if you get into an accident and use one of our certified repair shops, the repairs are guaranteed for life. So call. To talk with an Insurance Expert about everything that comes standard with our base auto policy. And if you switch, you could save up to 423. Liberty Mutual Insurance responsibility. Whats your policy . Otherworldly things. But there are some things ive never seen before. This ge jet engine can understand 5,000 data samples per second. Which is good for business. Because planes use less fuel, spend less time on the ground and more time in the air. Suddenly, faraway places dont seem so. Far away. Welcome back to power lunch. Im josh lipton. We were just talking with carl icahn on twitter giving his views on dell. Now mr. Icahn is out with a more full statement. Let me read it to you. Mr. Icahn saying in every war there are many battles. We are pleased to have won yet another battle, but the war regarding dell is far from over. Through its actions today mr. Icahn is saying the special committee has finally acknowledged publicly what weve been saying all along, that michael dells value substant l substantially undervalues the company. Mr. Dells previous characterization of his offer as best and final was neither. However, icahn saying we are not satisfied. The annual meeting will be held on the same date and time and record date for both meetings. Tyler, back to you. So the war indeed does go back on. Josh lipton, thanks very much. The bulls have been in charge on wall street and. Lock at that stuff. He can sit down for a table of two and sit mrs. Bear down. This is a very enterprising bear. Home startup control4 began trading on nasdaq under the Ticker Symbol ctrl. 64 million raised, offering 4 million shares and pricing at a midrange of 16 per share. The Company Makes software which connects lights, door locks, video cameras, security systems, and right now you can see the stock is up 23, almost 24 , 1982. First on cnbc from the nasdaq is control4s ceo martin plane. Welcome and good to have you with us and congratulations on your debut. A very exciting day for you, im sure. Thank you, tyler. Its a very full day for the control4 team. Were excited about the big opportunity that we have to bring the connected home to tens of thousands of consumers throughout the world. What do you use the money for . Were the leader at bringing the operating system of the home to the market. We are continuing to invest in our platform and our distribution. We see a big opportunity ahead and improving our products, expanding our product line and expanding our Distribution Channel are all priorities. Are most of your products in newly constructed homes and if so at what price point do the products usually sell . Well, our Business Today is largely existing homes for existing families. We do have about 30 of our business that is driven by new homes, and they range from custom homes of midrange to very high value, and were also seeing national and regional Builders Building homes that are for middle class mainstream couples and families in which they are putting control4 equipment into them. Some people, you know, love these systems. I imagine many more of us will find them as part of our futures as we we try to become more Energy Efficient and want to operate our devices off of one Central Control and maybe by our cell phones, but there are some individuals who are worried about security, that hackers could actually break into the codes that operate these systems in the home and come into your home and cause mischief or steal things. How do you answer that . Well, security and privacy are very High Priorities for the control4 team, and we publish best practices. We have a secure service so that consumers can access their homes via a very secure mechanism. Were constantly looking out to make sure that our customers have been safe with this experience. Congratulations again on the ipo today and continued good fortune to you. Thank you very much. Youre very welcome. Some dovish remarks from the st. Louis fed president James Bullard about the tapering and economy. Steve liesman has some details. Hi, steve. Tyler, the first fed guy out of the box since the meeting to give remarks, and hes suggesting the fed needs a little more data before i

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