That is not a very pretty chart. And the bayer case, several came out of hibernation today. Today we found another one. Shes going to make her case on why she is so confident stocks will go lower. But she is bullish on one sector. All of that is straight ahead. Tyler continues on vacation. Simon is my partner again, hi. As you say, theres a lot for the markets to react to. We have an upwards revision of gdp. A drop in initial claims this morning. We have the bases covered with International Correspondent. Reporting also on the new opportunities, lets kick off with you. Heres whats going on with the marketplace. This last pullback was just 4 from the s p. Investors fought at the dow bounced right off of its longterm trend line. You see over the last two years, every single time the dow has touched that green line, the longterm trend, the stocks have gone up afterwards. And this last time, august 7th, no exception, but some stocks have done marketly better than others. The dow is up 4 . Still, a good performance, but check out some of these names here. These are Large Cap Companies in the russell 1,000 and they have all outperformed since august 7th. Trinity industries is up 16 . This is a company that produces rail cars. So a transportation type may be even a leading indicator for the industry. Also another big one to look at. Check this one, its burger king, bkw up 21 . Of course we know the headlines here, theyre going to buy tim horten, do a tax inversion. And here, this company specializes in liver drugs, its up 33 just since august 7th. And you use that drop in the markets as a catalyst. You made out pretty well, not just buying etps, but these stocks. Back over to you. Dom, thank you. Were down 32 points on the dow. The concerns over the ukraine basically overshadowing stronger than expecting economic data. Bears making their case yesterday. David thaison on the show called for 3060 stock market crash right here on power lunch. Another big bear in five minutes time. Hes chief executive officer at rnc, craig is also here, Portfolio Manager for the morning star, five star rated horges. Welcome to you boept, thank you for joining us. Let me kick off with you dan, its inevitable if youre trading at these levels s p 2,000, but youre going to review where youre going. What the Bigger Picture is. Tice got a lot of attention. His argument was trees dont grow in the sky. Q serks only a short term fix. Why is he wrong . Trees dont grow into the sky, they grow in a strong foundation. Were in a position where were probably going to see 17819 or 120 on earnings this year. Likely 130 next year. And training got roughly 16. 7 pe trails and a 144 forward. Were not on that shaky a ground. The reality is that certainly we have to overcome the unknown with the fed right now, and when the fed does start to raise rates whether its first or Third Quarter of next year, were going to have a 5 to 7 pullback before people realize a 2 fed funds rate, you can go forward. Im not going to disagree that we have downside here and people probably should average into it, i thinkout start to look at the way we look, looking at the next 12 to 18 months. Theres not a major interruption in earnings and evaluations are fair. Gentlemen, stay with me. I have to bring an interruption, weve the had result of the auction. Rick joins us from chicago with that. Thanks simon. The yield of the 29 billion of seven years found a new home. 2. 045. That was the offer side of the one issue market. So very average there. 2. 57 a bid to cover almost spot on with ten auction average. 48. 8 on indistricts, better than a five. A bit below dealers took down a bit under 31 of this auction. This is a c fraux top to bottom. Even though its a longer maturity, simon, weve had a lot of buying going on today which took concession away. They are enamered with the long end, basically the week after next, when we get the threes, tens, and 30s, maybe investors will be a more aggressive presence at the auction. Back to you. Okay rick, thank you very much. Lets return to our equity conversation with craig. Craig, there are so many people who are worried where the market is and whether its fundamental. Can you get a new super cycle. We could gain further. The way we see at hogs, theres opportunities every we. The news cycle is negative, and theres a lot of anxiety and a lot of pessimism and you turn on the news and you get the press, the untold story are that u. S. Corporations have a lot of cab, theyre not hiring, so their margins are going up tremendously. Youre able to buy stocks at low prices. Especially compared to the growth rate. Were buying stocks at eight, 12, ten times earnings that are growing faster than that. Thats a healthy risk reward in our eyes. So you know, were kind of blocking out all the negative noise, and you know the economys going to recover. Thatll be a tail wind to us. We use the downdraft as opportunities to buy great stocks that go on sale. What are you buying at the moment . You know, we like energy, our favorite area is the enp area, two stocks, aflon and math dor. Both companies are run, great assets that have a lot of potential. To go from vertical drilling to horizontal drilling. Theyre in great areas in the basin. Thats an area we like. We have the papers, and we Love Industries have very high barriers of entry. And if we get that, then theres limited competition and theres a big upside in these names. Dom, what are you stocking up on for september . Well, i think this is just mentioned that, we like the energy space also, i would add petroleum on the same theme. Right now we think the Energy Prices range down, between 90 and 120. You have to focus on new production. And so whiting is just a very, very out in the forefront with regards to new recovery techniques. They are going to see production thats up about 17. 5 this year. Proven reserves are up 23 . We also look at the technology area. Michael chip technology, obviously going to be a consistent leader in the technology and rapidly moving into 16 and 13. And they pay at 3. 5 dividend while you wait. I think especially in this market, having that tail wind is going to be important. For sure. Its good to meet you both, thank you for your time. Thank you. We now down 33 on the dow. Lets get a market flash with dom chu. All right, so simon, down for the markets, but check out tmobile, the stock is smieking on a bloomberg report that the Parent Company of t smoebl willing to negotiate a sale of the company at 35 a share or more. Thats according to a person with knowledge of the matter. It is a Majority Shareholder of tmobile. Remember the tmobile rejected the 33 per share offer. And the merger wants to go as a stan alone company. Tmobile trading off about by 2 simon on the trade, back to you. Looks like the germans to want sell. Lets talk about the markets in general, whats cooking . Pressure from the ukraine hurt europe early on. Weve come off the lows as europe is basically closed here. Lets look, flight to safety stuff is doing well today. Gold tooks are up a little bit. Tenyearold yields are on the upside a little bit. Oil was up, its not anymore, ten year, dollar index also. Theyve been sideways for the last few months. These are not breaking out into any new realms. Its the retailers disappointing me. Abercrombie was disappointing wi with. Guess 50 drop in earnings. Tillys guidance below consensus. Theres three important trends. Number one, were seeing an elevate prod moelgs environment, nas put, pressure on margins. Number two, a love the nimble competitors out there. The kids are shopping at zarah, forever 21, and other places like that. They all turn over the fashion quickly, and the prices are low. Those are the two characteristics, and this is the most important, talk to the kids today, theyre more interested in the technology than in the clothes theyre wearing. Then its more important to have the right cell phone than to have the right bare of jeans. Thats the most important trend from when i was 20 years ago. Iphone 6 next tuesday. They will. Bob, over to you. Now to the crisis in ukraine, the countrys president says Russian Troops have crossed the border accusing russia of a direct invasion. Chief International Correspondent has the latest on whats tense and developing situation, michelle. Yeah, in just the last hour, leader of germany Angela Merkel says there will be new sanctions against russia on saturday. She made that announcement at a press conference in germany today after meeting with leaders from the baltic nations. The reason for the consideration, the evidence increasing evidence of actual Russian Military troops within the sovereign territory of ukraine. That new evidence today, nato releasing what they say are satellite images which they say show russian combat forces engaged in military operations inside ukraine. A general at nato says that there are 1,000 Russian Military troops operating in ukraine. And if youd like to see the photos yourself, theyre at the nato website. You can take a look. This comes on top of earlier in the week, you recall, ukrainians capturing troopers ten miles from the russian border. Once again, inside the sovereign territory of ukraine, and they were brought out in front of the journalists so they could be seen also today on russian today. The mothers of those paratroopers begging for their return. So this is what youre seeing here. These are various mothers asking that their children be sent back to russia. Also suggesting further evidence of russian involvement, alexander, hes the selfproclaimed prime minister, the selfproclaimed peoples republic which is in the eastern part of ukraine. He gave this interview to russian state television. He says whats the big deal. Weve had three to 400 russians fighting with us since april. It doesnt say their military troops. He calls them proths, etc. But once again, more and more evidence of involvement by russian which is like what ultimately matters to the markets, what kind of trade disruption occurs between russia and the rest of the world. If we see more sanctions over the weekend, were going to see more economic impact. Absolutely. Thank you michelle very much, appreciate it. The fbi is investigating a massive cyber attack on jpmorgan and other four large financial institutions. Vast amounts of data were stolen. Amen javrs is in washington, and we were talking about russia and questions about whether or not this originated from russia. Yeah, thats right. There are media reports to that affect, but we dont know a whole lot about this including where this attack oe rake natoed at. Department of homeland security. None are saying what the source of this attack is. Jpmorgan confirms it occurred. Heres the bullet points they gave us. Theyre not seeing any unusual fraud activity at this time. Also say theyre working closely with Law Enforcement to determine the scope of exactly what happened here. And what was taken. And theyre taking steps to safeguard sensitive or confidential information at the bank. Also say that customers will not be held liable for fraud because they have a zero Liability Protection program. If youre a customer of jpmorgan, you might be able to breathe a little bit more easily here today. Big question here is what was exactly taken and who was it who did it . Were waiting on answers to both of those questions. Thank you very much. To dominic chu now. Radio shack is soring on rumors the retailer could be in line for a possible cash infusion. Earlier this week, shareholders standard general could give radio shack a package. Standard general with 10 stake in vad owe shake recently gave American Apparel a lifeline as well. Radio shack, you can see they are up 35 . This is still a very small capped company. It is up 90 this month, back over to you. Thank you, dom. Back to the markets, Gina Martin Adams has been a strategist with a year end s p target for 1850. Which warnings signs should investors be paying attention to . Ginas back on power lunch, good to see you again, welcome back. Thanks for having me. One of the latest notes that you put out pointed to stocks and the flattening yield curve. And that thats something that verss should really be taking a look at. Why . What does tell you . You know, first let me just clarify, i consider myself to be mutual towards stocks, i know in the context of very, very bullish outlooks we look like were bearish, were not. Were thinking look, we probably enter an environment of policy uncertainty over the next six to 12 months. And the flattening yield curve supports that view. Typically as the fed gets geared up and move the short rate higher anyway, the long rate has actually moved lower. And weve seen the yield curve flatten so far this year. Similar to the way it has done over the last 30d years at this stage in the cycle. That doesnt necessarily mean its all over for the equity market, but it does mean evaluations stop expanding. In seven of the last instances in which the yield curve is flattened. Pes have fallen. So were expecting pes to come in label the. And the market to start to transition towards more of an earnings driven market opposed to an evaluation. Were expecting something more mixed . As opposed to this continuous bull trend that weve been in. Do you maintain for the s p . Its a fair value estimate. The very most important thing is what the fed does. Our assumptions are that Economic Growth will continue to improve, Inflation Numbers will mark higher and probably forces the fed hand by the end of the year. Maybe 2015 to expect higher Interest Rates going forward. That simple fact should create a bit of volatility and turmoil for stocks. We think its probably a longterm buying opportunity thats created. You know but in general, if the fed doesnt go forward with guiding investors to move higher. I think you can strongly make the case that stocks continue to move forward. Well ve have to see where it guides us. Stay with us, were going to talk after a quick break because there are sectors in places gina does like. Just take a closer look. It works how you want to work. With a Fidelity Investment professional. Or managing your investments on your own. 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Welcome back to power lunch, im in los angeles, sources telling me netflix is making a deal with Sony Pictures tv for the rights to the hit nbc show the blacklist. And that netflix will play in the blark of 2 million an episode which would be one of the highest fees paid for a show. Is serialized story line and following on nbc make it a good fit for binge viewing. Theyre trading up about half a percent. Wells fargo strategist gina marltens adams is back with us. There are sectors you like particularly health care, why . We like health care. Weve liked it for more than three years now. And the single largest history in earnings. This is a sector that just continues to beat expectations, continues to print very rapid Earnings Growth and we think its going to continue to produce incredible Earnings Growth over the next 12 to 18 months. Despite the fact that evaluations are creeping higher with health care with the rest of the s p 500. We continue to recommend Health Care Stocks as one of our sectors along with tech and materials within the s p 500. You must have esp, i was going to ask you about that. Some of them do look stretched, but i guess it depends on your time horizon as well. I think in a lot of ways you have to growth adjust evaluations right now and look at them in the context of an index thats higher end. And acceptabilities like the biotech segment within the s p 500 Health Care Sector have gotten beaten unquite frequently over the last year or so. The reality is that when you growth adjust these evaluations on the biotech names youre looking at incredibly cheap opportunities within the index. So i think you can find that trend in a lot of health care and tech and specifically within the s p, but within health care, weve really targeted that evaluation measure. Thank you so much. Good to see you again. Good to see you, thank you. Simon, down to you. September 9th, mark it in your calendar, thats when apple will hold its special event. Invitations going out. We believe itll be iphone 6. Now the iwatch too. Smith kline is beginning human testing of its ebola vaccine. Its one of several under development, the deadly virus has claimed more than 1500 lives now in west africa. But that number could end up being much worse. Much worse. Former reporter meg terl will have more on that developing story a little bit later on in the show. Simon, lighter note, check this video out. A hurricane off the Pacific Coast creating monster waves in california. Dangerous season certainly, but a dream for surfers. Plus crime and punishment, andrea days on the case. It was a 25 million psychic scheme brought down by the feds. One of the fargts, a new york city times best selling author who lost millions. Than story coming up right here on power lunch. Do you know what this means . The greater the curvature, the bigger the difference. 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