Im brian sullivan. It does remain an uneasy market. Investors a wee bit nervous ahead of next weeks fed meeting. Next wednesday is when we get the rate decision. The dow a little change, slightly higher today. Not bad. Oil, though, sliding again, inventories once again a concern. All the major oil stocks are lower today. Melissa . Im melissa lee. Heres whats happening at this hour. Heather brash will appear before the House Oversight committee next week to discuss the price of the epipen auto injector. It expects to complete the takeover of monsanto by the end of next year and roughly 6 Million People from florida to georgia are under a Flash Flood Watch as Tropical Storm julia moves up the east coast. Welcome to power lunch. Im michelle carusocabrera. Dangerous, risky, bubble, some of the biggest names in the financial world weighing in at yesterdays delivering alpha conference saying storm clouds on the horizon for global markets. Storm may already be here. You can look at the environment and i think it is very dangerous. I think it is a very dangerous time in the Global Economy and Global Financial markets. It has gotten extremely difficult to invest on a quarterly baseis. There is only so much you can squeeze out of a debt cycle. And were there, globally. Youre talking to 6 rate of return on stocks versus 1. 5 rate of return on the tenyear treasury and it strikes me that the i think paul singer said, the treasuries are hardly a risk free asset. Lets bring in george maris, and jack adly. Mr. Maris, ill start with you. One of the funds you run is the global alpha equity strategy. So youre committed to delivering alpha. People sounded fearful yesterday that the end of the credit cycle was approaching an end. Are you as worried as they are . You know, im not woreally. I think there is a crowded trade that is out there, it is in this low volatility safety trade and you see an incredible rush of capital to this. And what that has meant is that stocks arent being priced for growth. You know, there is growth, where it is open ended and secular. At the same time, youve got stocks that are reflecting distress asset prices. When the fundamentals are dramatically better. For my view, were finding great opportunities both in great secular growth stories around the world, as well as really interesting deep value stocks that are where the fundamentals are substantially better than the share prices reflect. Brexit, negative Interest Rates, populism, the rise of the right wing, we got all these things, george that have never happened before. Is there any historical guide . Can you look back at any textbook and say this is what i should do now . No. So i think thats what has got everyone so uneasy. All of these things put us in a place we have never been before, thats what created this anxiety. Here is what i found interesting, especially bill miller said long the s p, short the tenyear treasury, he said the tenyear was so overvalued, it reminded him of stocks in september of 1987, just before the crash. It was that so huge. Here is what i dont understand. If you think bonds are in a bubble, Interest Rates are going to rise. Isnt that going to be bad for stocks. Thats the historical play book. If we were playing off historical paradigm, thats what would happen. Thats not the case now. The reason rates are so low is because there are all these concerns about no growth in the environment, no inflation. If we get rates going up, it is a sign of growth, a sign of inflation. Thats actually very healthy for equities. If you look, jack, ill bring you in here on this conversation, you know, this notion that people are look for yield, right, thats why people went into dividend yielding stocks, look at the sectors in the s p 500, eight of the ten are yielding higher than the tenyear yield. So when yields go up, there is going to be this rush of money. George had mentioned the low volatility funds. Those are the funds in this particular trade. Arent things a little different this time in terms of what has gotten us here as people search for yield and push the valuations higher on these sectors like utilities and telecoms and staples . I think it is a consequence of, you know, we handed off to the Central Banks to say, here, fix it, we got low growth and want higher growth. And, you know, in many respects, just like putting sand in the shore and getting stymied when the tide comes back in. I think what it has done has certainly created a wedge between the Financial Markets and the and mainstream. And so as a result of that, investors are looking for yield willing to take more risks that theyre accustomed to taking. We have to keep in mind, any crisis that results from this is really a contrived crisis. This isnt a meteor coming out of outer space and hitting the earth that we cant get out in front of. This is something that has been created by the Central Banks and we have to work our way out. I dont think this is necessarily the next, you know, crisis that is going to create a huge crater. One of the arguments that i heard yesterday and i believe it was paul singer who made it and also mr. Dalio who made it and that was that what the Central Banks have done is try to create growth by keeping Interest Rates low. It hasnt worked or arguable they have created growth. But it is not arguable that they have not supported the prices of assets, bonds and stocks. And if those if they stop doing that, what does that say about the values of stocks and bonds . Perfect, i agree. Stocks and bonds are expensive. There is no question about it. The fact is that mcdonalds was able to issue a tenyear note in europe at 0. 75 a few months ago. I can assure you, no given that mcdonalds bonds in this country are trading at nearly 3 for the same maturity, why would anyone want to buy a mcdonalds bond at 0. 75 , because the European Central bank is buying it all. Investors arent buying that. And mcdonalds is taking that money back here and buying back their own shares. So there is no question about Central Banks running interference and creating high valuati valuations, but the fact is, theyre not going to necessarily turn off the spigot and run away. They recognize that, you know, there is an addiction here, and were going to have to slowly get off of this liquidity, but do it in a gradual way. Michelle had mentioned going long stocks, and short g7 bonds, but when this whatever you want to call it stops, when the merrygoround stops, wont all Asset Classes go down . There is a bank of america, Merrill Lynch fund survey released yesterday, 54 of Fund Managers say both stocks and bonds are overvalued at this point. And were just laying out, you were talking about the low volatility funds, pushing up the valuations. There is this thought there is no other alternative essentially pushing that trade higher. How is it going to end . Are we going to see a reversion where we have that break in correlation . I think you can have, you know, significant declines in fixed income markets and equity markets and have equity sectors do very well. You harken back to the year 2000, when the markets were to be kind a disaster, financials were up 50 that year. So you can have sectors that have been oversold or underappreciated do extremely well in a difficult environment. You talk about equity markets overvalued, 17 times earnings for the s p 500, historically thats very, very high. It is not high relative to fixed income at this current time. And at the same token, there is sectors within the s p 500 that are extraordinarily cheap. You can look at financials that are trading distress but arent. Or look at chinese internet plays. Alibaba trades at the same multiple as the regulated u. S. Utility, that doesnt make sense. So you can see this unwind of the safety, this low volatility trade, creating tremendous opportunities if youre active. Jay jack, yesterday, may not have seemed like some sort of a red letter day, but to me and some others, very interesting moves because it doesnt get a lot of attention, not sexy, doesnt scream at you, the tenyear yield rose by 3 , the s p fell by 1 , a very rare diversi diversion. Did yesterday establish something new . I do think that fair value for the tenyear treasury is higher in yield than where it is right now. If you look at nominal gdp, which is relatively low, thats at 2. 7 , not 1. 7 . Thats historically been a pretty good proxy for where the tenyear treasury ought to be. So, yeah, i would say we could get 100 basis point rise out of the tenyear treasury and that it will certainly create some disruption. But, you know, im not suggesting that or i dont think anyone is suggesting that fair value for the tenyear is 3. 5 or 4 or Something Like that. George maris, jack, thank you both very much. Appreciate it. Pleasure, thanks. If you are in pittsburgh and you hail an uber today, it could arrive without a driver. The question is, would you still get in . The Company Testing out its Autonomous Vehicle program. Were going to have the details. And making the case to buy valeant stock, a bold call from one of the most legendary stock investors. That is straight ahead. What if a company that didnt make cars made plastics that make them lighter . The lubricants that improved fuel economy. Even technology to make engines more efficient. What company does all this . Exxonmobil, thats who. Were working on all these things to make cars better and use less fuel. Helping you save money and reduce emissions. And you thought we just made the gas. Energy lives here. We think with valeant, it is a different company, different management, now a slow growth Specialty Pharma Company that will generate a lot of free cash and you should be able to make that a 25 to 30 on valeant in the next over the next five years. That was legendary investor bill miller making his case for valeant pharmaceuticals. Yesterday, at delivering alpha, that call grabbed the attention of kay kelly who followed up with millers folks today who told her that number, that was per year growth, in the stock, over the next five years. Joining us now on the phone is luis chen, a buy rating on valeant. Great to have you with us. Youre a valeant bull here, but even in your most bullish scenario, do you see a scenario in which there can be 25 to 30 return each year for the next five years . I think thats probably a little bit early to look at over the next five years. But i think in the near term that kind of upside could even be conservative if valeant is able to deliver upon some of the objectives that they have laid out for the company. And i do think the street is missing a lot of the potential upside the stock has here. So lets tackle the first year then. In terms of upside to the 25 to 30 prediction made by bill miller, what are going to be the primary drivers to that. Is it primarily asset sales . So these are the things i think the street is missing and if a company is able to demonstrate that, you know this could probably drive some multiple expansion for the stock, the stock is pretty inexpensive where it is, trading at four times pe multiple, and i think it could expand to eight times, you know, a group on average trade about 12 times. So the three things i would notice, first of all, i think the street underestimates valeants ability to pay down debt. You did note that. That is a big overhang on the stock. Thats first and foremost. The company has given good visibility over the next year on how to get there. And even put numbers behind that. The second thing i think they need to do is stabilize their earnings and part of that will come from paul hair, who i have worked with through two companies that i covered and hes been able to successfully do that for those organizations as well. And then i think the third thing is they have a great branded drug pipeline they have been executing on and getting products approved and no one is giving them any credit here. And they have two big products coming up for approval through the end of the year and next year which could be blockbuster drugs to the company. Like the new management . I do like the new management team. I worked with both of them before and other companies that they have been Senior Executives for and they have done a great job to turn around or enhance the organizations. What do you need to see happen in the next six months to make you believe that 25 could be conservative . So i think what they need to do is paul hair, hes new to the organization, hes been there for seven or eight days, but a very experienced cfo that has good communication skills. I think he needs to give people confidence in what the numbers will be. I know there is some anticipation because hes looking at 16, 17, and beyond numbers and where he might come out with that. And given the fact that valeant has had a couple of downward earnings revisions, you know, i think people are worried ahead of that. I have a lot of confidence in paul that hell put out numbers that they can meet or beat. Thats first and foremost. I think the second thing here is to show some evidence of the divestiture of the noncore assets and give people confidence they can sell the assets for something worthwhile. I think skepticism is that, you know, they overpaid for these and they did it under a benefited tax structure, so if they try to sell these, maybe they wont get what they paid for. Well leave it there. Thank you very much for your time. Louise chen of guggenheim securities. Quickly, i did something on the back of valeant i promised i would never do, math. I looked at 25 a year, where would that put investors if you bought it today. If you believe bill mill, 25 gains, 34, 30 a share, by the end of 2021, five years, 25 brand of return, you would have a share price of approximately 84 based on where it is today. It was a 257 stock in july of last year. So youre still down 67 if you bought at the peak. No one will knock 25 returns. It sounds great. But you look at the Historical Context of the stock, it doesnt even really get you a third of the way back to where it was. Up next, two big reasons why tim cook is dancing today. Power lunch will be right back. This car is traveling over 200 miles per hour. To win, every millisecond matters. Both on the track and thousands of miles away. With the help of at t, Red Bull Racing can share critical information about every inch of the car from virtually anywhere. Brakes are getting warm. Confirmed, daniel you need to cool your brakes. Understood, brake bias back 2 clicks. Giving them the agility to have speed precision. Because no one knows like at t. [ala m beeping] the highly advanced audi a4. Yes, that is video, if youre on the radio, picture a lot of people dancing. Tim cook, the apple ceo is one of those folks dancing, you see him at the top, and hes dancing for a reason other than, i guess, just pure joy. He and other apple staffers are setting out to prove the new air pod Wireless Headphones will not fall out. Even while dancing. A little air pod mob. Thoughts . More like swimming to me. I think he has to dance more vigorously for me to be convinced theyre not going to fall out. Melissa known for her desire for vigorous dance when testing headphones. How about running . Hes basically hes, like, chair dancing. Doesnt count. When i run, all the stuff in my ears falls out all the time. Makes me crazy. So how are we to believe these little pods are going to stay in . Always asking the right questions. All right, well, tim cook may be dancing again today, but for a different reason. Get to dancing dominic. I like to dance when i hear cnc music factory. Thats a little blast from the past there. Yes, i can dance a little bit more. Dancing is apple shares up more than 4 today, best day in nine months for the stock. A top gainer on the dow for the second day in a row, adding 30 points to the gains by itself. So those shares are on track now for the first three day win streak with consecutive gains over 2 each day. First time since april of 2013. The gains are likely due to mobile Service Carrier sprint, stronger orders for the iphone, hits stores this friday. Stock more than doubled its average full day trading volume. Still a couple of hours to go, guys. Despite todays gains, down since march, but the stock remains a darling among wall street analysts. 84 of analysts tracked by them still have the equivalent of a buy rating. Back over to you. Dom, thank you. We should really be saying maybe thanks to apple, were seeing the stock market didnt see it fall as much yesterday because of apples gains and in todays session, apple is helping technology be the leading sector on the s p 500. The technology, by the way, yesterday, lost the least on the s p 500. So it is really thanks to apple that we sort of remember all that hand wringing in the low 90s, is this it . Is it over . Should you buy it here . Should have bought it at least in the short term. Another news alert. Brazilian prosecutors filed corruption charges against louie da silva and his wife. Back in august, the police recommended prosecutors charge them. This is a key step. Well wait it see if the judge accepts the charges. If that happens, this politician who was widely loved across latin america will face trial. An incredible change of fate. Wells fargo still in the headlines over controversy it created phony accounts for customers. Next up, were going to speak with a reporter who knows the story well because he broke it. Three years ago. This straight ahead. Were drow. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. This just in. 50 million customers data was not compromised this morning in a Security Breach that didnt happen. Wall street, not rattled. At all no. Sir, sir. What went right . Everything. We have a brief statement on this nonbreach. Were happy to report theres nothing to report. My dads company wasnt hacked today. Cool. Im sue herera. Here is your cnbc news update for this hour. President Obama Meeting with mya